Is telematics actually encouraging better driving behavior?

Is telematics actually encouraging better driving behavior? | Insurance Business

Is telematics actually encouraging better driving behavior?
Ever since telematics became available in the auto insurance marketplace, many brokers have urged their clients to consider adopting a usage-based insurance plan as a way to encourage safe driving practices and possibly even reduce their auto insurance premiums.
While telematics has been lauded as a theoretical application, new research reveals that it may also have significant tangible benefits in practice.
A new survey conducted by the Insurance Research Council (IRC) has found that 56% of drivers who employ telematics adjusted their driving habits as a result of the device.
Although 38% indicated that their modifications were minor, 18% said they made “significant changes” to their customary driving practices.
The IRC did not assess whether those adjustments were safety-oriented, but the organization does feel that increased awareness will prove advantageous in reducing auto collisions and their associated claims down the line.
“While we can’t say with certainty that the changes drivers make are always for the better, or whether beneficial changes that are made become permanent, we can confidently say that the introduction and use of telematics technology is a move in the right direction,” said Elizabeth Sprinkel, senior vice president, IRC.
Canadian brokers believe that anecdotal evidence suggest this is the case domestically as well. Buckley Insurance Brokers Ltd., a brokerage that quickly seized the opportunity to offer a UBI program, says that policyholders appreciate telematics’ premium discounts and its own employees recognize the value it provides in promoting better driving habits.
“Installing a device definitely makes you more cognizant of your driving behavior and forces you to be aware of how quickly you’re accelerating and whether or not you’re engaging in hard braking,” said Brian Tatum, director of business development and marketing, Buckley Insurance Brokers Ltd.
The brokerage sends reminder emails that show clients their driving scores, as well as any possible discounts they may be eligible to receive upon renewal. This communication may also serve as a prompt to continue driving safely.
It also has the added benefit of enhancing the customer service experience.
“We’ve been offering this for almost a year, so we have policies coming up for renewal that may include significant discounts, and obviously they’re pretty happy about that,” Tatum said.

 Source: The Insurance Research Council (IRC)