Telematics

Question 1

describe telematics

Answer 1

use of wireless devices to transmit driving data in real time back to an organization

Question 2

potential rating variables from telematics (6)

Answer 2

• where vehicle is driven
• number of trips per day
• mileage
• braking
• acceleration
• cornering

Question 3

reasons for increased use of telematics (3)

Answer 3

• new digital technology in cars
• widespread use of smart phones
• lower technology costs

Question 4

ancillary services provided by telematics (5)

Answer 4

• driver coaching
• vehicle diagnostics
• roadside assistance
• emergency response
• stolen vehicle recovery

Question 5

types of telematics solutions (4)

Answer 5

• dongle - self-installed device provided by insurer
• black box - professionally installed device
• embedded in car manufacturing
• smart phone

Question 6

insurer benefits of telematics (4)

Answer 6

• more accurate risk segmentation
• new communication channels with customers
• more efficient claims management
• competitive advantages, especially for early adopters

Question 7

challenges working with telematics data (3)

Answer 7

• very large datasets
• lack of standardization
• collecting the most useful variables

Question 8

consumer benefits of telematics (3)

Answer 8

• possible lower premiums and ability to control premium
• focus on education and promoting safety
• ancillary services

Question 9

consumer concerns with telematics (5)

Answer 9

• lack of transparency of models
• privacy concerns over use of data
• limited regulatory oversight
• disproportionate impact on low-income and minority customers
• proprietary nature makes it harder to switch insurers

Question 10

societal benefits of telematics (4)

Answer 10

• could eliminate use of socioeconomic variables
• incentives to reduce driving leads to fewer accidents, congestion, carbon emissions, infrastructure costs
• reduction in subsidies, so rates are more equitable
• increased number of insured drivers

Question 11

regulatory concerns with telematics (4)

Answer 11

• standards for collecting and reporting data
• consistency among companies
• preventing discrimination or use of prohibited variables
• access to review models