With the US economic recovery, miles driven have also been showing a positive trend lately. What does all this mean? More cars, more miles, and more traffic on the road – all put together – it means more crashes! It’s no surprise that the total number of vehicle crashes has recently shown a halt in a declining trend of several years and is expected to begin to rise again.
More crashes imply more claim costs for auto insurers. As it is, with increase in loss, cost inflation and constraints in further hikes in premiums, there is already pressure on insurer profit margins. With additional claims coming in, profit margins are going to be hurt even more. This, coupled with other factors, is driving insurers to go on a cost cutting spree. A key mechanism for auto Insurers to reduce their claims costs is to leverage telematics to improve their risk assessment accuracy of drivers. Telematics helps in not only assessing risk, but also actually altering driver behaviour and reducing risk of crashes. In this whitepaper, we aim to share the need for thoughtful and well-planned approach to Telematics with clear strategy and a commitment to invest in IT infrastructure.