Mobility has taken over every industry and has also dipped its proverbial feet in the auto insurance industry. With GPS and accelerometers as high-tech accessories, mobile technology for the automotive industry has also come a long way and still has many miles to go. In an era where digitization and mobility are one of the basic necessities, most car insurance providers are lost under piles of paperwork. That is the reason why the concept of car mobility has changed its focus towards the insurance industry.

A combination of mobility solutions – telematics, analytics and communications – has eased the burden on auto insurers through driving style insights, data collection, analytics and reporting that benefit all stakeholders.

User Based Insurance (UBI)

Insurance providers struggle with allocating premium amounts for their clients. Despite their best calculations, they have incurred losses. Traditionally, insurance companies calculate premiums based on driving records, vehicle usage, previous claims, insurance scores based on credits, etc. The insured believe that these premiums usually have a fixed value.

Telematics technology will change the face of car insurance through usage-based insurance (UBI) pricing where customers pay based on their usage, i.e. driving behaviour. Pay-as-you-drive gives customers and insurers the freedom to calculate premiums based not only on driving records and vehicle usage, but also on real-time or actual driving information.

Real time information

Telematics can calculate every minute detail of the customer’s driving style, including every hard brake, quick acceleration, parking style, etc. Analytics will merge, analyze and interpret this data, simplifying it to understand customer driving patterns and the risks involved. This driving information will be shared with the insurance provider, who may use it to allocate the insurance premium amount for the respective customer.

Auto insurance companies have realized the difference real-time information makes in claims processing. With the ability to capture real-time data in the form of images, videos, driving information, etc., there will be adequate information to process a claim or decide the amount of insurance for a customer. It will eliminate the possibility of modified data and increases the accuracy of the analyzed information.

Time and Efficiency

Timing is everything. Waiting weeks for insurance agencies to process a claim can be time-consuming. Insurance companies will soon provide each customer with a more personalized and expeditious service. Mobile devices will allow the evaluation of claims or consultation with clients in their comfort zone. In the event of an accident, real-time data can be captured in the form of videos or images, eliminating the possibility of improper claims or incomplete information, which can result in loss for both parties. Automation will reduce paperwork and redundancy. At the same time, it will increase efficiency and speed up claims processing.

Data management

With the reduction of paperwork and the introduction of technologically advanced analytical frameworks, managing large amounts of data has become child’s play. Analytics uses complex algorithms and mathematical equations to organize, analyze and interpret large volumes of information. The ability to instantly and accurately retrieve relevant information will save many hours of work.

beyond insurance

Mobility solutions for auto insurers come with additional services such as emergency roadside assistance, geo-fencing for parents to monitor their teens’ driving, customer engagement to ensure customer loyalty, driving tips and other customizable options. Insurance companies will be able to go beyond their usual services for the convenience of the client.

Telematics Challenges

However, there are some concerns about the use of telematics by insurers. The standardized regulations on data capture and its process are yet to be determined. This raises concerns about loss of privacy or misuse of data. The other concern is when the client wants to switch to another insurance provider. The new insurer may not accept your driving data as the data collection method is different. This could result in the customer losing their benefits and having to start from scratch.

However, telematics technology is relatively new and has not yet fully taken over the market. Like any new technology, there will be bugs that will be fixed in due time. These challenges will not be an obstacle for car mobility to be integrated with insurance, since the advantages of car mobility outweigh the disadvantages. Gradually, all insurance providers will rely heavily on mobility solutions to develop their business and it will become inevitable for the use of car insurance.