CI Spotlight – Auto Insurers Embrace Vehicle Telematics Systems

by on May 01, 2013

Vehicle TelematicsTelematics technology has been a hot topic in the auto insurance industry for some time now. Over the past month, a number of Property & Casualty Insurance Monitor firms have rolled out new telematics initiatives for their auto policyholders.

What are Telematics Systems?
Telematics systems consist of a small device plugged into a vehicle’s on-board diagnostics port. Conveniently located beneath the steering wheel, the device monitors an individual’s driving behaviors, such as mileage, acceleration, breaking, distance, etc. The program offers participants the opportunity to potentially save on their auto premiums by demonstrating safe driving habits. Firms will then use the collected real-time data to analyze driving patterns and risks.

Vehicle Telematics Offerings Across The Industry

Esurance and USAA
Esurance and USAA are the most recent firms to offer their customers telematics service offerings. Both of the firms’ third-party systems are aimed at distracted and teen drivers. Esurance’s program features a plug-in device and free mobile app that blocks mobile phone calls, texts, emails, internet and other applications while the car is in motion. Users are able to customize what items and apps to block and create a list of numbers not to block for incoming calls. For teen drivers, parents are able to receive email notifications if the driver attempts to disable or remove the device or delete the app. USAA’s GPS-enabled service, called Young Drivers Intelligence, records driving data and transmits data to a secure website where users can track their progress. However, the program does not affect clients’ auto policies, premiums or discounts.

Building upon their pre-existing Drivewise program, Allstate released a new mobile app that enables registered drivers to view trip details and overall performance grades directly from their device.

Allstate Drivewise Mobile App
Allstate Drivewise Mobile App

Progressive rolled out a marketing campaign, called Rate Suckers, promoting their Snapshot discount program for existing and prospective clients. The firm utilized all of its public channels – public website, Facebook, Twitter, YouTube and television spots – encouraging customers to defend themselves against individuals such as “The Late Night Driver”, “The Constant Driver” and “The Hard Breaker”, and sign up for the 30-day trial.

Progressive Rate Sucker Snapshot Campaign
Progressive Rate Suckers Snapshot Campaign

Closing Thoughts
The recent system introductions and advertising efforts by leading insurers illustrate the growing telematics interest within the auto insurance industry. Looking to the future, insurers should continue to explore the latest advances in telematics and mobile safe driver technology as these services help enhance their value proposition to consumers. While there are some legal and privacy-related obstacles to be addressed, telematics will undoubtedly play an important role in how carriers compete in the market.