Technology development that we are seeing all over the world looks like in the future we will have a community-driven by robots or AI. In all industries, progress is coming using the technology and we have to recognize the great outcome that comes with it. At the same time, efficiency and money are the terms that are in everybody’s mind when it comes to technology. This is the reason why we should focus more on the Insurance Telematics Industry. From standard premiums to PAYD or even UBI, the CANbus data shaped in different algorithms like driver behavior or predictive maintenance combined with artificial intelligence have a huge impact in the industry for all the parts implicated.
Depending on the market the insurance premiums are calculated differently. Also, in some areas, the premium refers to the basic data related to the owner of the vehicle and does not take into consideration other aspects like driver behavior, environmental aspects, or the health status of the vehicle. Developed markets, where the concept evolved from pay-as-you-drive insurance premium to usage-based-insurance, have used more systems than a mere standard “black-box”, like how it is known in the telematics industry jargon.
In the beginning, there was only the GPS position. Other parameters were introduced later. Today we can talk about driver behavior algorithms and predictive maintenance based on machine learning and artificial intelligence because of technology development. Nevertheless, in the future, it is more likely that new concepts will appear based on the present information or driven by market trends.
Why Insurance Telematics is important?
Not only is Insurance Telematics important, but it is also necessary in order to have a clear view of the market in the first place. Telematics gathers all data from the vehicle and related to the driver and offers the possibility to send them in real-time to the fleet manager, company owner, leasing company or car rental company, or even to the underwriting department inside an insurance company. In this way, the premium calculation and underwriting process are redefined and refined at the same time based not only on the data but also on different patterns that can be observed or on different KPIs that can be set. Telematics is helping the carriers to verify and validate the data provided — everything from accurate vehicle identification number reporting to traffic violations. Information is valuable. Data is valuable but more than that, how the data are used is even more important.
CANbus data in Insurance Telematics- first layer for a comprehensive analysis
Nowadays, vehicles are built with a lot of sensors and information. Moreover, 3rd party technology is offering a lot of valuable data related to vehicles and drivers in real-time. In the near future, probably, we will talk about insurance telematics for autonomous driving and self-driving transportation.
CANbus, according to Wikipedia's definition is a robust vehicle bus standard designed to allow microcontrollers and devices to communicate with each other's applications without a host computer. Actually, the CANbus networks gather all the information from all the ECUs of a vehicle. In order to have a comprehensive report, to make analysis and to be able to predict a huge amount of accurate data is needed. Another aspect that is important is: How the data is interpreted and how it is used for future applications.
We hear everywhere that the data is gold or that data is the new future money. It is true. A large set of data helps to have a clear view related to the industry. However, what is the purpose to have a bucket full of data if they are not defined yet by some best practices related to them? In fact, the studies show that by using accurate CANbus data shaped in comprehensive algorithms and application the insurance premium can be reduced by 30% and the driver behavior on the road can be improved by 20%. It also provides statistics related to CO2 emission, thus helping us reduce our carbon footprint and build a safer and greener environment.
Now you CAN!
An advanced telematics solution is not only to be seen as an investment but as a possibility to update at minimum costs. Making a comparison with consumers’ goods it is time to change the vision and approach when it comes to fleet management and mobility. If we have the latest version of the smartphone that offers us the possibility to stay connected with the present, why not treat the fleets with the same responsibility and install a high-end telematics solution? Present technologies offer the possibility and open the opportunity to future Insurance telematics approaches. With a reliable partner for gathering the data and for building smart and high-end driver behavior and driver profiling algorithms, any insurance company can be sure that it will face a huge increase in incomes because the costs with damages will reduce drastically.
Now there is still a testing period on the market. Also, the lack of regulations in some countries makes it difficult for insurance companies to decide or to see the real benefit of insurance telematics. At the same time, users still consider insurance primarily as an expense or obligation despite the huge benefits it can offer.
Maybe a change into the mindset and developing dedicated Insurance Service Provider departments or companies will make it easier for each party involved in the process of the insurance of vehicles on the roads. Together with developing markets and shared mobility and smart cities concepts this approach will be possible.