We seem to be getting closer and closer to the point where the personal lines auto insurance industry begins to pursue serious telematics offerings — beyond small pilot tests. Of course, Progressive has been at the forefront for many years with various pilot programs and patents starting in the late 1990s. And with more than 100,000 customers across many states, Progressive’s new Snapshot mileage discount program is more than just a pilot.
In California, where the state’s rating plan mandates the use of a vehicle’s annual mileage, several carriers are adopting their own flavor of mileage — based discount programs — based on telematics technology. The expectation is that telematics will provide much more accurate data compared with error prone estimates from drivers and agents. Other carriers, such as Safeco, have chosen to dip a toe in the telematics space with more narrowly focused teen safety programs. American Family has addressed the teen-safety market with a program based on Drive Cam technology, which turns on a video camera that detects risky behavior.
The market seems ready to move to the next step with telematics. Allstate recently launched its Drive Wise program in Illinois, with plans to expand to other states this year. Unlike programs that monitor only annual mileage, Drive Wise also monitors risky behaviors, such as speeding, hard braking, and rapid acceleration.
In addition, ISO recently issued this press release to announce its location-based telematics solution, part of a fully integrated suite of telematics systems offered by ISO’s Applied Infomatix group.
With many of the largest carriers and ISO starting some type of telematics program, the question is no longer if but when. Companies that are slow to adapt may be left behind. For carriers interested in learning more about telematics implementation options, we encourage readers to contact ISO to learn more.