Insurance Telematics and Tailored Coverage

Insurance companies usually look at demographic factors such as age, gender and location as one way to measure the risk profile of Car Insurance policy holders. For example, vehicle accidents are considered to be more frequent amongst male drivers 25 years and younger, hence this group tends to pay a higher rate on their Car Insurance premium. 

But, new technology now has the potential to change the way insurance providers conduct business. If you're dissatisfied having to pay more on your monthly premium, insurance telematics could be the best solution. By having the telematics device fitted into your vehicle, insurance providers could apply more tailored Car Insurance premiums based on your actual, as opposed to your projected, driving behaviour.

Telematics manufacturers explain more on how this technology will have an impact on the future of the insurance industry.    

Johan Jonck from Arrive Alive

Arrive Alive is South Africa's leading road safety information portal, enhancing awareness among South African drivers and saving lives.

Which demographic would benefit the most from this technology?

“Here we look especially at younger drivers who are perceived to be a higher risk.

I believe that there is significant value to offer in the field of fleet management and measuring of driver performance, as well as actual crash investigation. Telematics technology may strengthen the case of a driver who is not at fault in the event of a road crash or collision and confirm that damage caused was not due to his recklessness and negligence.”

What could the impact of this technology be on the state of SA roads?

“Insurance telematics technology can play a significant role in self-regulation and enforcement, helping to keep drivers compliant to safe driving practices. This will allow us all to be safer on the roads. It can be very effective both for fleet operators as well as individual drivers who drive safer in the knowledge that they may be able to save on Car Insurance premiums or get rewarded for safe driving behaviour.” 

Paul Visser at Altech Netstar

Altech Netstar provides a nationwide fleet management and stolen vehicle recovery service, using a proprietary land-based radio network.

What’s the history of your technology and how did it develop into what it is now?

“Altech Netstar has 20 years' experience working with insurance companies. And, of the 15 000 telemetry units we fit on a monthly basis, almost 50% are units with GPS/GSM capability. We entered the Usage Based Insurance (UBI) market in 2010 and we started development on our own platform in 2011/2012. In addition to this, we have been providing insurance companies with driver behaviour data since 2010. This makes us one of the largest providers of driver behaviour data in South Africa.”

What are some of the future plans to optimise your device even further?

“We plan to expand on the features that are offered by StarDrive (a web- and mobile-based driving performance tool) to ensure that it will always be on the leading edge of technology and to create the best possible user experience for our customers.”

How does the South African adoption of telematics compare to the UK, US and China?

“The insurance model in South Africa differs largely from the overseas market due to the fact that it is not compulsory to have proof of insurance with you at all times. However, the rising costs of insurance, fuel and maintenance is busy changing the perception in the local market.

We are not only moving into a market where there will be more PAYD (Pay As You Drive) models, but also into a space where PHYD (Pay How You Drive) will become relevant. StarDrive also offers additional features – like the ability to manage your own ‘fleet’ of vehicles with the alert management component or to get visibility on your driving style along with the styles of your loved ones.”

Sandra Page from Tracker

Tracker prides itself on being a people company, offering value to its customers through an innovative range of products and services that are geared towards recovering your vehicle.

Are there legitimate concerns that information such as where a driver is going and when and what they are texting, could be unfairly applied against the interests of the driver by the state or a private company

?

“No data is collected or stored pertaining to what a person is communicating. For example, when a person sends a text message, only the keystrokes are picked up. So we are really only deducing that you are either sending an email or an SMS. The accelerometer on your phone does not transmit what is being typed or whether your child is playing angry birds in the back seat. Only that your phone is being used, i.e., that keystrokes are taking place.” 

What control measures are currently in place to protect the average citizen from abuse of their personal information?

“The Protection of Personal Information Act will protect citizens in the case of abuse and will prescribe how companies process data from the start. Tracker is fully committed to ensure that it protects its clients’ and business partners’ personal information in accordance with relevant legislation.”

Who does the telematics device in your car technically belong to?

We remain the owner of the unit until you have paid for it in full. We also remain the owner of the SIM card that is included in the unit for telematics customers, even after you become the owner of the unit or the agreement ends.

What should South Africans bear in mind when opting for this technology?

“Modern technology allows for the processing of massive amounts of behavioural data. This is a fact of life and it will probably continue to be that way as long as there are human problems that need solving. One of those problems is the dangers of transport. And we believe that technology can solve this problem.

Yet, there are those who look to exploit the very same technology and abuse the wonderful ability it has to offer us insights into how to change things for the better.

That's why it is important that customers choose reputable companies who stand by their values.”

Pierre Bruwer from Ctrack

Ctrack specialises in the research, design, development, manufacturing, sales and support of technologically advanced GPS/GSM Vehicle Tracking and Fleet Management Solutions.

How does the device work? What are some of its most impressive engineering and software features?

“Ctrack Telematics is enhanced with a number of communication mechanisms (depending upon configuration) such as GSM, 3G, LTE, Bluetooth, WiFi, and satellite that allow it to communicate the real-time state of the vehicle and its current movement to the cloud.

What are some of the future plans to optimise the device even further in the future?

“The Ctrack Insurance Telematics solution is ever evolving and adapting to market needs and requirements. One of the important product optimisations and improvements that is ongoing pertain to the employment of Big Data enabled driver risk analyses, as an ongoing improvement on the path towards predictive risk contribution analysis.”

In conclusion

Vehicle telematics is one of the most practical methods to control risk and deliver value to both drivers and their insurers through accurate Car Insurance pricing and good driving award programmes. With this technology, insurers will have a realistic picture of the actual driving risk of drivers and are therefore able to more accurately and fairly estimate premiums. Not only this, but fleet-wide risk analyses now become a possibility without the need to resort to risk proxies such as age and gender.