Even when the Internet of Things aka IoT was not that popular, the Telematics industry was undeviatingly flourishing with both small as well as big players of this sector. From Asia To Europe and America, Telematics has come out with very potent and effective solutions in the market. Auto accidents caused from rash driving or machine failure in a vehicle can be life-threatening and hence, the need for vehicle telematics is rapidly increasing and as a result, the Vehicle Telematics Market has a huge net worth of around $233.34 billion.
Though the key aim behind Vehicle Telematics was to decrease the number of auto accidents, as per one of the research, there has been no major decrease observed in the number of such cases. The Insurance premiums are only increasing, considering the increase in the auto component costs too. For instance, in the past, a minor road accident required a simple repair in the vehicle, however, in today’s scenario, the process has become more complex as in many cases, some expensive sensors have to be replaced. The local laws such as covering the personal injury of the driver, if taken into consideration will also intensify the financial aspect. To put it simply, the auto insurance premiums are rising and there is a need to regulate them.
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As a result, the insurance sector is looking after some technology that can help in making a rational roadmap when it comes to premiums and claims. A usage-based model is a great idea that insurance companies, vehicle owners, and fleet management providers should focus on. In fact, one of the companies in Europe has been working on this model for the last two years. They have been offering personalized insurances based on the vehicle Telematics solutions.
When talking about the rate at which the technology is processing, a connected car is expected to upload around 25 GB of data onto a cloud after every hour within the next five years. Moreover, there will be about 116 million connected cars running in the United States as per the studies, thus a lot of data will be generated. For this reason, predictive modelling will be required so as to process the data and hence Artificial Intelligence and Machine Learning would be the need of the hour.
There’s no doubt in the fact that auto insurance companies are constantly working towards decreasing their costs. For them, a model customer would be a person who takes good care of the car and Vehicle Telematics can help them know if the service schedules have been adhered to on time. Telematics delivers information if the driver is accelerating and then pressing the break suddenly, an indication that he/she is driving rash. Moreover, it can also tell at what speeds a person makes a turn. All this data can help in the classification of the driver as a ‘safe driver’ or ‘unsafe driver’. Using this information, auto insurance service providers can decrease the premiums for safe drivers and hence make better business decisions. The data available in the police records such as traffic violations can also be made available to the companies so as to know a person’s driving pattern. Parking tickets and traffic fines are other parameters that can help in building the profile of the “safe driver”.