When UK insurer, MORE TH>N launched ‘Drive’ in early 2014, it marked a significant shift in the insurance telematics landscape. As one of the first ‘app only’ insurance telematics offerings in the Google Play and AppStore, it stepped away from embedded, engineer-installed black boxes or driver-installed OBDs (on-board diagnostics). At the time, the market viewed scores derived from an app alone as ‘not good enough’ to provide a confident view of risk (to the insurer).

The early days of telematics apps

The customer proposition was good: drive for 200 miles with the chance (on achieving a good score) of earning up to a 20% discount on Premium. This was the era of the ‘Try Before You Buy’ (TBYB) model, which led to a plethora of similar apps.

Was it successful? Ultimately, no! In the UK the Price Comparison Websites (PCWs) own the distribution channels making it challenging to attract customers directly (i.e. getting someone to download an insurance app). Completing 200 miles, getting a good score, coming back for a quote, and aligning with a customer’s renewal date (which only applies to 1 in 12 of your audience) proved cumbersome, resulting in low sales numbers. From a business case perspective, it failed.

Another example is Aviva’s earlier launch of the Aviva Drive app. Despite heavy marketing and infrastructure investments, it faced similar challenges. Telematics Service Providers (TSPs) advocated for device-based solutions, emphasizing the need to capture all journeys accurately.

Over the years, insurers have been trained to believe apps alone ‘don’t work’. The main concerns have been:

• Incomplete journey data
• Risk of missing critical driving events
• Difficulty in customer acquisition and engagement

Technological advancements and current viability

Fast forward to 2024 - what’s changed? Well, there’s still a stigma in the market about telematics apps. However, the world has certainly leaped forward in terms of an app being considered a viable solution. Leading insurers like Progressive, State Farm, Admiral, Hastings, and Aviva now view apps as not only applicable but in some markets, the only solution.

Why? Well, technology has evolved:

• Algorithms have become more sophisticated (to deal with the ‘mobile’ nature of the device).
• Battery and data usage improved and are no longer an issue.
• Journey capture (start point) accuracy is now very good.
• And of course, what’s the one thing that ‘traditional’ telematics solutions can’t see? Phone distraction. It’s the biggest contributor to accidents and deaths on roads across the globe.

So, the technology and the intelligence (both human and AI) have transitioned to a point where data accuracy & credibility should no longer be a blocker. And we haven't even talked about the cost benefits yet!

The future of telematics in insurance

Modern telematics apps provide credible, real-time data, enabling insurers to engage, coach, incentivize, and reward customers effectively while maintaining data privacy. Importantly, the cost of these solutions has significantly decreased thanks to Sentiance’s market-leading on-device technology, making it possible for insurers to offer telematics-powered propositions to ALL customers, not just niche segments.

Can telematics break away from its restrictive, UBI (Usage Based Insurance) origins and become a standard feature in auto insurance? Can it help all drivers be safe on our roads, saving lives globally? We think so!

Discover how we’re leading the way in transforming telematics solutions for insurers. Contact us today to learn more about our innovative approach to enhancing driver safety and reducing risks at a fraction of the cost.