The positive environmental impact of the technology can also help sell the concept to consumers, says chief executive

Usage-based insurance (UBI) telematics technology can allow drivers to take a more direct role in influencing their premium levels through analysing risks and providing insurers with evidence of reduced risks profiles – loading to reduced premiums for consumers.

According to Colin Smithers, chief executive at Redtail Telematics, this allows consumers to “take an active part in [their] risk equation”, should they “choose to accept a telematics policy and use its guidance wisely”.

UBI telematics primarily measures data focused on acceleration, breaking, speed and the time of day and location where an individual drives – using this data, insurers can determine riskier and less risky profiles of policyholder and provide premium discounts to safer drivers while also benefiting their own risk portfolios.

Smithers explained: “Quite simply, if you are a good driver, you are less risky and your premium will be lower”.

However, data sharing and the perception of being monitored can put some consumers off.

“Some motorists raise questions about privacy relating to telematics – ‘it’s a bit intrusive, a bit big brother’,” said Smithers.

He explained that the roll-out of telematics technology had been slower in some markets because of these concerns – in Germany, for example – despite most telematics providers’ commitment to data privacy and GDPR regulations.

Net positives

What is often less considered when evaluating the impact of telematics technology, noted Smithers, is its potential to positively impact emissions and protect the environment.

He explained: “Telematics technology has proven to be effective in assisting individuals and businesses to reduce their carbon emissions as there is a known correlation between lower risk driving and better fuel economy.

“What is less well known is that the driver simply having knowledge of vehicle monitoring through telematics can achieve some of these benefits – in fleet applications, an empty placebo black box has been shown to improve fuel economy by between five and 8%.”

Smithers added that the perception of telematics could be further improved by publicising these extra benefits: “It’s time that people embrace the potential of telematics to make the world a safer and cleaner place.

“The benefits go beyond individual motorists, fleet owners and operators to society at large.”