Telematics is a combination of technologies that is slowly changing the automotive industry from the inside out. Its influence on cars and drivers is expected to be far-reaching, and it is driving massive changes in the way people think about cars and driving.
While the course being charted by telematics is one in which the relationship between people and the cars they drive is going to change radically in the not-too- distant future, its effects can also be felt in the present.
And one of the biggest contributions that telematics is making to present day drivers is in helping to improve their safety.
Get fairer car insurance. Based on how you drive
A look at the tech
Telematics comprises a range of technologies that enable various systems in cars to communicate with external devices and systems.
This includes:
- navigation systems, which are already a standard feature in newer generations of
vehicles - vehicle tracking systems, which are used to track vehicle behaviour in real time, and
can generate reports on vehicle activity and position at the time of incidents - remote control systems which can influence various systems within a motor vehicle
- vehicle to vehicle or vehicle to fixed point communication systems, such as
electronic toll gates.
This technology first emerged onto the market in the form of navigation devices and expensive telematics tracking systems. However, it has advanced rapidly, and the emergence of smart phones has allowed telematics technology to break new ground in both sophistication and affordability.
Mobile telematics
You’re probably already aware that your smart phone makes use of built-in navigation and tracking technology which can be accessed via a variety of third party apps. This technology has carved out a huge chunk of the market share previously held by GPS device manufacturers like Garmin and TomTom, providing smartphone users with flexible access to increasingly accurate and detailed navigation and location information.
However, you may not know that smartphones are capable of doing far more than sending and receiving information about your location. The sensors in smart phones are also capable of measuring acceleration and deceleration. In other words an app can quickly transform an ordinary smartphone into a sophisticated multi-functional telematics device.
This effectively puts the power of telematics into the hands of the average person who has a smartphone and a car – at no additional cost. And this has already been demonstrated to have positive implications for driver safety.
How telematics promotes safer driving
Smart phones aren’t the first thing that comes to mind when you think of safe driving.
They’re becoming a major source of driver distraction on the roads, and are considered to be as detrimental to driver behaviour as driving under the influence. However, telematics applications have the potential to turn smartphones in life saving devices.
By tracking and scoring individual driving behaviour mobile telematics applications generate data that can be used to measure and incentivize better driving behaviour. This was quickly recognized by forward-thinking insurance companies, who developed usage-based insurance models that calculated premiums based on the policy holder’s driving behaviour.
Whereas ‘safe driving’ campaigns traditionally attempted to scare people into better driving, usage-based insurance premiums instead incentivize safe driving with financial rewards in the form of lower premiums. The results so far have been impressive. A 2005 pilot programme run by UK-based insurance company, Aviva, resulted in a 20% reduction in accidents for drivers aged 18-23.
This type of finding has massive implications. Not only are young drivers the demographic most at risk of having a fatal motor vehicle accident, but they are also the demographic who pay the highest insurance premiums. Telematics combined with usage based insurance products therefore has the dual benefits of making affordable premiums accessible to young drivers, while providing a massive incentive for them to drive safely.
Telematics enters Australia
Australia is the latest country to benefit from the introduction of smartphone telematics systems. UbiCar, Australia’s first usage-based insurance company, recently released its ground-breaking telematics app.
This app is designed to help drivers track and score their driving. Incentives include the opportunity to win prizes, and app users are able to redeem points earned for safe driving at UbiCar’s online store. Additionally app users are offered fairer priced car insurance that’s based on how safely they drive.
