The various receptors in and around a vehicle are used for more than just monitoring driver behaviour. How will telematics data be used in insurance and other industries, and, ultimately, how will this impact us as drivers and policyholders?
Your car runs on petrol but your safety depends on data. Telematics technology has enabled drivers to digitise their trips and, in doing so, minimise their risks.
By installing telematics technology inside a vehicle – from the everyday vehicle to cold-storage trucks on the N1, to the combine harvester in the mielie field – the resultant data has led to innovative ways of insuring clients in South Africa.
“For King Price, and many other insurers, AI has been a game-changer,” says Wynand van Vuuren, a client experience partner at King Price Insurance.
Telematics has moved insurance from being a luxury to a practicality. “Where it used to be prohibitively expensive, it can now integrate multiple disconnected sources of data within a company and make sense of what’s useful and what’s not,” says Van vuuren.
The first port of call in the ongoing list of telematics benefits is the well-known one: satellite navigation.
“Currently, GPS and electronic mapping tools that enable drivers to locate a position, plan their route, and navigate a journey, are widely used in telematics” says Peter Olyott, CEO of Indwe Risk Services. But this is where too many insurers and policyholders stop. Telematics isn’t another version of Google Maps, but rather a part of a data-generating system tailored for the driver – one that responds to accidents and irregularities, and is constantly negotiating a swifter, safer journey, he explains.
The pros of employing telematics in insurance to this point is well known, says Olyott, “GPS anti-theft systems reduce car thefts and improve stolen vehicle recovery.” Telematics-enabled services such as accident assistance records incidents at the moment of impact, which is then used for compiling crash data reports that provide insurers with specific details of the event, including speed, braking and cornering of the vehicle during the accident.
The data that telematics generates has become so refined and responsive that a sudden swerve of the steering wheel or clenching of brake pads will alert your insurer.
Having telematics technology installed in your vehicle means that responders will be made aware of an accident even before emergency services are alerted. “The accident assistance notification is triggered once an impact is detected – customers see this as a huge value-add,” Olyott explains. Knowing that an insurer will automatically be alerted if you are involved in an accident, and will then dispatch emergency services immediately, is a “huge benefit” to clients, he says.
This digital approach to transport doesn’t stop at ensuring a safer trip for drivers and passengers, as it’s rapidly redefining how cargo is transported across the country.
Telematics also improves risk management for commercial fleets, Olyott says. “Information provided by vehicle telematics solutions provides insurance companies and their agents the tools to reward fleet operators that maintain a high standard in traffic safety,” he explains.
Frans Prinsloo, Head of Mobility at Lombard Insurance, explains, “In a fast paced and complex trading environment, it is becoming increasingly important to focus on preventing losses rather than budgeting for the cost carrying losses or increased insurance premium.
“There are a number of entities that can assist fleet and logistics companies in providing proactive risk solutions. The data obtained from tracking and video-telematics will assist in shaping these solutions,” he says.
Prinsloo points to the “office team” concept: people on the ground who assist the driver based on data generated by the vehicle’s route. “This is a great asset in a situation of civil unrest, provided they are up to date with what is happening on the road and linked into a network that can provide early warning signs of such events,” he says.
“A bureau service can also assist a fleet owner to monitor his fleet,” Curtis Davey, Divisional Director of HCV and Commercial at Natsure, says. “This can be done by a third-party service provider who will monitor the fleet owners’ vehicles 24/7. The bureau will also contact the drivers should they deviate from their route; or when a vehicle starts making sudden movements, indicating that the driver might be starting to suffer from fatigue.” Fatigue and cell-phone usage is the highest contributing factor to accidents and, in some instances, forces the driver to stop in unsafe places. “The use of cameras and the use of a co-driver system is effective in eliminating this,” Davey says.
Telematics is also the eyes of fleet-owners in a volatile pandemic market. “The use of cameras is also of great value in monitoring and providing critical information when determining the route that needs to be used when delivering goods,” Davey says. “This also assists in monitoring driver behaviour. It should be used as a tool to encourage the right behaviour and not as a method of reprimanding a driver. Making use of safe and secure truck stops is important in ensuring the safety of the cargo,” he adds.
Fleet owners should be aware of where the vehicle stops and keep themselves updated on developments along the various routes. Some of the telematics systems are able to force the vehicles to come to a stop if the unit is activated, but this is mostly to reduce hijacking, Davey says.
With the appropriate technology, the office team can track the actual whereabouts of the vehicle, which enables them to advise the driver on routes to avoid, Olyott explains. “Emergency services can be dispatched when the driver triggers an assistance button,” he says.
Cold storage freight is the reason food stays fresh on shelves, locally, and when exported overseas. “Cold store freight trailers are increasingly incorporating telematics to gather time-series data on the temperature inside the cargo container, both to trigger alarms and record an audit trail for business purposes,” says Olyott. “An increasingly sophisticated array of sensors, many incorporating radio-frequency identification **(**RFID) technology, is being used to ensure that temperature throughout the cargo remains within food-safety parameters,” he explains.
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Drawing digital lines
With all the data arising from every telematics trip, there are invaluable silos of information funneled into research assistance. Floating vehicle data can provide motor insurers with valuable statistical data about driving behaviour that can be used for fine-tuning complex insurance models for premium calculation, Olyott explains.
Geofencing derives its value from this and further assists in getting passengers, drivers, and cargo to their destination safely and on time. A geofence is a virtual perimeter drawn around a physical location. Like a real fence, it creates a dividing line between the specific location and the area surrounding it, but the technology is able to detect movement inside the designated area. “The geofencing of routes is very helpful in route planning and route optimisation,” explains Olyott. “Fleet managers can set geofences around the route destinations that the delivery drivers need to visit and service,” he says.
“This capability can assist logistics companies to track their drivers and identify delays, missed visitations, unscheduled breaks, etc. Some technology has the capability of planning a particular route if a vehicle diverts from this a possible alert can be triggered,” Olyott continues.
This geofencing technology coupled with onboard cameras allows supervisors to follow the journey from an armchair in the office. “The cameras on the dashboards can also assist in viewing live footage of the possible danger that the driver and vehicle could find themselves in. Synergising the vehicle location to the risk area can assist in ensuring that the area is avoided,” says Olyott.
Individual driver habits aside, telematics technology has already flagged general risks on our roads, making it not only a proactive tool but a preemptive one too.
“We already have data available which provides insurers and drivers an upfront indication of the location of hijacking and accident hotspots,” says Justus van Pletzen, Insurance Markets Consultant for Netstar, a subsidiary of Altron.. In the long run, we can expect to see more intelligent geofencing around drivers and risk elements, he says.
Wear and tear
Accidents can happen but maintenance must happen. The unseen side-effect of getting from A to B is the rust and friction that eats away at your car’s driving efficiency and lifespan.
The total risk and losses to insurers aren’t necessarily found in stolen or written-off vehicles but rather in the minor repair of insured vehicles, Van Pletzen notes. “These minor accidents make up the lion’s share of expenses and losses,” he says. But telematics data can smoothen out the bumpy ride, so to speak.
“How can insurers mitigate these little incidents? By using telematics and increasing driver awareness – how they accelerate, whether they are too harsh on the brakes, among other behavioural changes,” Van Pletzen says.
Telematics has spread beyond cars and trucks and into tractors with King Price’s “pay-as-you-farm” agricultural insurance product.
“Farmers own multi-million-rand pieces of equipment and machinery, including tractors, harvesters, mobile irrigation systems and balers,” says Gideon Galloway, CEO of King Price Insurance.
These implements work incredibly hard for three to six months a year, but following this period they stand idle in a shed for the other six to nine months. But if your insurer knows exactly when and how often a baler is put to work out in the field, it’s easier to customise a specific plan for insuring this machinery.
“The new product gives farmers comprehensive cover for their agricultural vehicles year round, with an annual rebate based on the time that the vehicles are used,” Galloway says. “We know exactly where and when the insured equipment and machinery is used, which helps us better manage our risks.”
Telematics is at the core of pay-as-you-farm. “We attach tracking devices to the insured vehicles and machines – which not only allows farmers to always track their vehicles, but to make fact-based decisions on their vehicles’ usage, rather than relying on spreadsheets and gut feel,” says Galloway.
When farmers go digital the benefits are significant. The certainty for insurers that comes with this data collaboration is welcome in an industry subject to the whims of the weather and the markets. It is estimated that the new product can save farmers an average of 20% on their insurance premiums, while lowering their capital risk and maximising profits.
To good use It’s not only commuters, farmers and truckers that need convincing of the potential of telematics technology – insurers must be the main drivers behind adoption.
While insurance is an industry built on risk, Van Pletzen points out that a considerable amount of insurers have been risk-averse in pushing telematics to their clients.
“It seems the competition is so heavy from an insurance perspective that many insurers only look at premiums and miss the other factors,” says Van Pletzen. “There may be a general fear of losing clients if they impose too many requirements.” But these solutions need to be used to become useful. “It needs to be intelligently used by insurers and I don’t think they always have the capacity,” says Van Pletzen. It’s thus up to the clients and service providers like Netstar to bolster adoption, he adds.
“We’ve got the methodologies and the technical abilities that could really improve their lives,” he says, “either by way of data dumps or intelligent data.” Van Pletzen insists that for insurers it’s a worthwhile expense.
While insurers aren’t obliged to encourage telematics, the gap between those who do and those who don’t could widen. With data to back up your driving, clients will start to end up paying according to their behaviour. “Telematics as a whole has a huge percentage play in rates and premiums,” Van Pletzen says. If you’re a good driver and you drive accordingly, your insurance will be cheaper than that of bad drivers,” says Van Pletzen. “It just makes sense.”
Telematics is only getting started, Galloway says. “Going forward, AI will enable insurers to provide an even smoother customer experience, with personalised interactions based on client data, while they will increasingly be able to customise coverage for specific items and events. It will also be quicker and easier to settle and pay claims following an accident, while decreasing the likelihood of fraud.”
The bottom line for the client is that the more data they generate, the better an insurer will be able to price their risk, which will result in cheaper premiums – with the added benefit of actually saving lives on the road.