Intelligent Mechatronic Systems: Insurance telematics“will broaden the spectrum of choices to consumers and insurance companies"

Intelligent Mechatronic Systems: Insurance telematics“will broaden the spectrum of choices to consumers and insurance companies"

What does your company do?

IMS delivers solution platforms to make vehicles safer, smarter, and greener. Within those confines, we deliver turnkey telematics solutions to insurance companies and governments. We currently have active engagements with six of the top 25 insurance companies in the US, delivering usage-based insurance (UBI) programs. We are also a world leader in road pricing, being involved in the road pricing demonstration program being undertaken by the UK Department for Transport.

What is your role in the insurance telematics market?

IMS enables turnkey solutions in the UBI space so that insurance companies can focus on insurance and turn to us as experts in the delivery of the data they can use to enable smarter pricing or future policy options. With over five years of experience working directly with insurance companies in Europe and North America, we have been able to distinguish ourselves in this market by focusing on the data, its quality, and the tools and processes that enable and support these programs for insurance companies and their policyholders.

How important is the role of telematics throughout the insurance market space?

We’ve seen a significant increase in UBI programs and industry awareness over the last two years as the business models have improved and the market has developed. You will see a significant increase in customer-facing programs in the next 12 months as more companies work out the ROI and approve UBI product offerings for competitive reasons.

Which trends will impact the industry most in the coming years and why?

Adoption of UBI programs will increase as more pressure is placed on insurers not to use credit scores as a rating variable, and as insurers look for other, more relevant data for pricing. Adoption of telematics technology by the vehicle OEMs will allow for increased channels to purchase insurance options by consumers. App stores that are currently being developed and deployed by the automotive OEMs will become increasingly relevant as a channel to offer usage-based insurance options to consumers.

Hybrid and electric vehicle adoption could have a significant effect, as there will be government pressure to have these road users pay for their ‘fair share’ of road taxes and related expenses, which have been traditionally collected via some sort of gasoline tax. Commoditization of the data will begin to occur as more programs become well developed and opportunities exist for data aggregation on a broad scale.

Where do you see the insurance telematics industry heading in the next five years?

You will have a spectrum approach to insurance telematics—now, in five years, and even in 20 years—as the average life of a car is now around 10 years and with mass adoption of telematics at the OEM level taking at least another five years. This spectrum will encompass OEM programs, aftermarket, and fleet programs. New business models will develop over this time as well that will broaden the spectrum of choices to consumers and insurance companies. IMS is active in all areas mentioned above and is one of the current leaders in the aftermarket space and well positioned to lead the OEM space as well.

John Reynolds will be speaking at Insurance Telematics USA 2010 in Chicago on September 13–14.

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