However, as usual, there are two sides to the same coin. Besides aiming to help the high-risk groups such as inexperienced drivers, occasional drivers with a low annual mileage or young drivers, telematics will also help good drivers. In addition, it comes with free anti-theft tracking and a personalised driving report. Black boxes, smart boxes or simply telematics looks like salvation for the majority of drivers and insurers. So what's stopping some insurers from adopting it and why are drivers not jumping for joy and waiting in queues to get it installed?
The first and most important reason why not all insurance companies are making progress towards this technologically advanced system is transition costs. Getting a flawless personalised algorithm is costly. Moreover, there are numerous add-ons to the system such as reward scheme, price list of extra costs for the insurers, etc. The role played by the threat of getting hacked by either a third party or the users themselves is far from negligible. One last reason perhaps worth mentioning is the scepticism of drivers themselves. As the system is not compulsory yet, insurers have to get the right incentive to opt for this solution. Most insurance businesses, not very famously known for being enemies of innovation, lack evolved marketing strategies. The subject is quite sensitive also when it comes to trust. In some countries, you can or have to add the drivers on the insurance contract. If a high-risk insurant wants to better his driving score, he or she might like to add a good driver on the list. In this respect, the list of threats and worries from the insurer's point of view is quite elaborate.
On the other hand, there are also many reasons why drivers are taking their time to consider their options. One of them is precisely the fact which is mentioned above as an advantage. With the new system installed, bad and insecure drivers are likely to be exposed to stressful experiences and they could be prone to getting trapped in the first tricky road situation. Good drivers have some reasons for restrained optimism too. For example, living in an area with a high crime rate can mean extra costs for off-street parking or the need to take anti-theft measures. Another example is an annual base distance limit - this is a nice example of how an insurant is obliged to communicate with his insurance provider on quite a regular basis. Some contracts force you to agree on extra miles beforehand, others are based on pay-as-you go systems - and as usual, the more options, the higher number of possible complications. There is no doubt that telematics is going to change the face of car insurance, but insurers need a bit more time to see a fair value in it.
There are many insurance companies which have implemented the system successfully. Direct Line Group, UK is one of them. Dan Freedman, Head of Motor Development, will share the company's approach to telematics as well as the lessons learnt while selecting the right technology, operations and customer propositions at the European Motor Insurance Summit on 11 - 12 February 2016 in Rome. Dan's vision of the future of telematics development will be further commented on by some other professionals with extensive experience from the field such as Roland Voggenauer, Director, Motor Expert EMEA from Swiss Re, Andrew Lowe, Former Head of Motor in eSure, and Jose Antonio Sobrino Reineke, Senior Consultant Motor in Munich Re.
Without doubt, telematics is the future. Take advatage of being a step ahead of your competition and get to know all you need for its successful implementation into your business - Insure the possibilities with real experts!