Telit Wireless Solutions, the machine-to-machine (M2M) solutions provider, has teamed up with Danlaw, a provider of vehicle telematics solutions and automotive electronics and Driveprofiler, a provider of usage based insurance UBI solutions, to promote best practice in usage based automotive (UBI) insurance solutions.
The three companies aim to help bring clarity and share best practices with industry regulators and members of the automotive insurance value chain as the popularity of UBI rises world-wide.
Reacting to unprecedented demand from broadly adopted UBI, solution providers to the insurance industry everywhere are scrambling to design and bring to market ever bolder approaches to deliver more savings on insurance premiums and enhanced user experience for drivers the world-over.
But the architecture of some solutions has created apprehension among insurance providers and regulators, according to Telit. That prompted the two companies to step up efforts and add value to discussion evolving ensuing globally on the pros and cons of using the smartphone not only for account management ‘apps’, but also for sensing and detection of drive-time and driver behaviour – two critical dimensions used by insurers to calculate discounted premiums.
It is clear that smartphones will continue rising in popularity and penetration in the coming years. The International Data Corporation (IDC) predicts that the market will see continued increase in Smartphone shipments expected to top 1.7 billion handsets this year and over 2.2 billion devices by 2016. With the rise of the smartphone, the market has also seen an increase in the number and versions of operating systems upon which these smartphones are based.
Even though there are three prevalent systems, they proliferate in versions quickly filling the market with platform variants, making effective use of smartphones a challenge for developers and insurers eyeing the popular consumer gadget and its internal sensors as a source of driving information.
Regulators and insurance carriers alike are also concerned with the potential for fraud associated with hacking of smartphones. Until the smartphone and OS industry resolve this issue to the satisfaction of critical services providers, the viability of the use of smartphones for UBI programs remains questionable.
“The Smartphone today is an extremely powerful and versatile tool for just about anything,” said Nate Bryer, vice president innovation at Danlaw. “This one device has successfully supplanted point and shoot cameras, voice recorders, mp3 players, navigation devices, handheld gaming systems and portable video players. There is a plethora of power and functionality in every smartphone with new functionality being added each year.
“Despite all this power and functionality though, smartphones still lack the ability to provide clean, consistent and accurate driving data that can be used in usage based insurance programs. As of today, the only way to generate and gather the data needed for a UBI program is an embedded or self-installed device that is tied into a vehicles electronic system.”
Bryer continued: “Insurance companies today can actually use both by having these two devices working in tandem to provide a very powerful and customer friendly product that combines the data quality of an installed device with the versatility and ubiquity of a smartphone.”
Ken Osler, director at Driveprofiler added: “While our solution suite caters the full range of services from smartphone to an OBDII [on-board diagnostics] installed device, our working experience is that customers prefer the option of using the OBDII device for UBI and the smartphone as a ‘teaser’ to introduce the concept.”
“The use of smartphone technology as a primary means of data collection, processing, and transmission for UBI, or any other telematics application is problematic at best. The technical strength of the solution is minimal, the regulatory climate is unfavourable with legal and liability risks essentially unbound,” said Cyril Zeller, VP global telematics at Telit Wireless Solutions.
“Telit cellular modules have integrated solutions like Danlaw’s and Driveprofiler that are based on dedicated hardware embedded or directly installable in the vehicle’s OBDII diagnostic port for many years now. These provide much superior technical performance handling exceptionally the complexity and managing risks associated with programs in all application areas under development by the insurance industry,” said Zeller.