The increasing use of Telematics in the UK, US, and Europe is driving data standards development activity. One industry leader believes standards are key to maintaining consumer confidence while telematics momentum increases.
In a March 15th press release, Wunelli, Ltd., a UK based supplier of telematics solutions to the motor (automobile) insurance community, announced that it was “kicking off a campaign to create a common standard for the collection, verification and security of telematics data.” Wunelli noted that the ” implementation of the gender ruling in December 2012 is expected to prompt a huge rise in telematics products and take-up.” (We blogged on the implementation of gender neutral requirements in the EU in March 2011).
In addition, there is pressure in the UK to establish standards in advance of regulatory activity. Sandy Dunn, Chairman of Wunelli said: “Insurers have a small window of opportunity to agree to a common data standard. As an industry we need to grasp the opportunity now, while telematics is still in its infancy in the UK, or we will find ourselves facing the same issues insurers faced, for example, in sharing ‘No Claims Discount’ information.” Dunn and Wunelli are inviting senior industry leaders to a data focused Think Tank, in Loch Lomond sometime in the next 3 months.
At the same time, US-based ACORD is responding to pressure from its members to investigate data standards to handle telematic information. At the 2012 Insurance-Canada.ca Technology Conference (ICTC), Marcia Bernier gave an update on ACORD activity, including the establishment of a work group to gather information on data requirements.
Bernier believes that there are value points from the data gathered by devices in vehicles that go beyond underwriting. “If you stop and think about it, there are a great many advantages to using the data from these devices,” states Berner. “Let’s say an insurance claim is submitted for a severe case of whiplash. If the insurer could prove the person was hit by a vehicle going only 5 miles per hour, they might not have to pay the claim. This is the type of data being collected by some devices.”
Dunn believes that a number of elements will drive implementations of telematics, and the industry must be prepared. “The fact is, the cost of telematics solutions has fallen dramatically and will fall further as volumes increase, particularly when the gender ruling comes into play at the end of year. We anticipate that, of the 25 million motorists on the road today, 15%-20% will take up a telematics solution in the next 2 years – that’s between 3 and 5 million telematics policies,” Dunn said.
He continued, “We need to be ready or we will face a whole host of challenges, not least the problem of cars being fitted with a different box every time the customer changes provider! This will ultimately lead to a lack of consumer confidence.”