Now the use of telematics in respect of motor insurance in India is in the offing and until now the premium for motor vehicles which was based on the make and model of the vehicle, geographical utility as well as capacity shall in some time also include other criteria based on telematics.
These would include the driving pattern of the motor owner with respect to the speed, his driving hours and if he travels during non-peak or peak hours. The analysis shall be done on the basis of GPS-enabled device that shall be implemented in the motor. Accordingly, the risk profile of the customer would be judged and motor insurance premium shall be worked out. The technology is in use in US and the UK and is gradually making its way in the European nations.
The discussion paper on the telematics suggests"Today, premiums are being charged based on available information related to limited parameters only. If accurate information and more relevant data are available, premium can be worked out more scientifically, commensurate with the risks involved".
"Telematics helps insurers estimate more accurately accident damages and reduce fraud by enabling analysis of driving data (such as hard braking, speed and time) during an accident".
Companies who already incorporated Telematics
Bajaj Allianz in the private player segment is the first company to introduce the feature by the name Drive Smart and after the user installs the device he gets real-time feedback on his driving pattern and you shall see the premium directly reflects the usage and driving habit of the driver based on the risk profile adjudged by the insurer.