The auto insurance industry is facing an unprecedented number of challenges brought on by heavy price competition and increased claims costs. In response, insurers across the globe are either considering, or have already implemented, telematics solutions. Through wireless technology, telematics devices record and transmit data in real time back to insurers. Insurers can use this data to develop more accurate pricing, improve the granularity of risk management techniques and reduce losses by enabling better claims assessments.
While telematics can offer valuable benefits to insurers, it also presents many challenges to these companies as a telematics device will transmit a data record every single second (for just 100,000 vehicles that adds up to more than 1 terabyte of data per year), making managing all this data a significant task. In addition to the volume of data, insurers will likely be receiving data from different types of telematics devices, with various data formats. All this means carriers will need to implement advanced data management and analytics to get the most out of their investment in telematics.
A new report from SAS titled Telematics: How Big Data Is Transforming the Auto Insurance Industry reveals that telematics used in conjunction with information technology and analytics can enable insurers to turn the data explosion into a major competitive advantage.
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