CVTA: “Insurance telematics will spur growth of telematics to the commercial space and for individuals”

CVTA: “Insurance telematics will spur growth of telematics to the commercial space and for individuals”

What does your company do?
The Connected Vehicle Trade Association (CVTA) is a non-profit business league established to facilitate the interaction and advance the interests of the entities involved in the vehicle communication environment. The Connected Vehicle Trade Association enables the collaboration of companies, organizations, and governmental bodies engaged in developing bidirectional vehicle communications. Membership is open to any corporation, public entities, standards and specification organizations, educational institutions and qualified individuals.

What is your role in the insurance telematics market?
The mission of CVTA includes all industry sectors involved, including insurance telematics. Our first effort is to understand who the stakeholders are, their objectives and ownership in this environment, and engage them to allow for a collective understanding of the environment. We communicate what the initiatives are, and what has been developed to date with regard to technical, social and policy concerns. From there, we explore the areas of opportunity, how to participate, and help communicate member capabilities to the correct parties. 
We seek to build a dialog for examination of the proposals, pre-deployment plans and build outs within the affected business sectors, between businesses and public entities, and for international efforts. In order to assure an effective means of accomplishing these important objectives, we must build consensus by those who will build, validate and operate the systems and infrastructures developed.

How important is the role of telematics throughout the insurance market?
Insurance telematics is an important, emerging market that we believe will spur the growth of telematics to the commercial space and for individuals. Telematics has long been the domain of business-to-business relationships, but the insurance aspect brings us to a direct interaction with consumers. Broad recognition of the benefits of vehicle connectivity by consumers will generate demand. Since the telematics platform is immediately useful for other members of the ecosystem and for other public and private entities needs, we see it as uniquely powerful leverage to advance growth in many sectors.

What is needed for the large-scale success of PAYD/usage-based insurance?
We need compelling solutions that are seen as high value for the consumers, the insurers and the system providers. We believe those exist and are demonstrable.  However, since all insurance is governed by state regulators, and not a national agency, we need to have pilots in various areas so that the insurers and their technology partners can proliferate the Pay As You Drive/How You Drive/When You Drive/Where You Drive in meaningful and compelling ways.

Which trends will impact the industry the most in the coming years and why?
Increased fuel cost, congestion and increased need for traffic information will drive consumers to look more closely at their driving behaviors, cost of operations and ways in which to improve their travel experience. Insurance telematics will figure prominently as they will lead the other sectors in developing price points and safety improvement programs for their clients that will motivate adoption.

How do you view the role of auto OEMs in the insurance telematics arena?
I am unclear what role the OEM’s will play in the insurance telematics space.  While they are interested and exploring the programs, my view is that OEMs would need to see some common or baseline programs that all insurance carriers offer. This would allow them to craft parallel incentives that further enhance the safe driving behavior of their customers.

Where do you see the insurance telematics industry heading in the next five years?
I see a great deal of leadership coming from the insurance telematics initiatives along several fronts. For one, insurers deal with individuals as well as industry, and are able to field programs that both can subscribe to for short to long periods. Other than the phone companies, no other industry in this space deals with consumers in this manner so broadly. Customer Relationship Management is going to be paramount to defining and deploying telematics systems ubiquitously to a broad range of consumers. Since they understand the value of such systems, and are uniquely positioned to provide systems whose value can be understood and translated into either dollar savings or improved safety (thereby possibly lowering premiums). In addition, those same systems will improve their cost/loss models for reducing risk. Insurance telematics is one of the key enablers for telematics, and I can only see it growing considerably over the next 5 years.

For more on insurance telematics, join the sector’s other key players at Insurance Telematics USA 2011 on September 8-9 in Chicago and Telematics Munich 2011 on November 9-10.

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