Nationwide Insurance sheds light on telematics program

Major insurer has embraced new tech – is it time for you to do the same?

Nationwide Insurance sheds light on telematics program


By Bethan Moorcraft

Our personal data is flying around everywhere whether we like it or not – so why not embrace this data-driven world and use it to our advantage?

Onboard telematics and connected vehicles are no longer a thing of the past. Programs like Nationwide’s SmartRide collect driving data in order to communicate drivers’ behaviors and award users with discounted premiums for safe driving.

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Not only can telematics devices promote safer driving awareness, but they can also save money by reducing the amount of accidents on US roads leading to costly claims.

However, rejecting onboard telematics could result in a continually escalating base premium rate for the insured because they’re not making the most of the safe-drive discount, according to Larry Thursby, vice president in standard auto, Nationwide.

“The real penalty will ultimately come for people who choose not to use onboard telematics,” said Thursby. “By choosing not to share their driving behavior with their insurer, they won’t be able to qualify for the safe driving discounts that others are earning. You will ultimately see their base rate level likely inflate as more and more customers become comfortable with the concept of sharing their data.

“That will expand beyond smartphones or self-installed telematics devices and it will move into the connected car world. As more and more vehicles have onboard computers capable of wirelessly transmitting data, I think you’ll see more folks willing to share that information with their insurance company because of the realization that the data is going just about everywhere else, so it might as well be used to earn a discount.”

Onboard telematics devices also have great potential to cut costs and time in the claims process. They can be used to kick-start the claims process by pre-filling information about the date, time and location of a road accident. Nationwide is “working aggressively” on how to pull telematics data into the claims process in an effort to improve customer service.

“There is definitely a place for telematics in the claims process,” commented Thursby. “At Nationwide, we’re hoping to use telematics to improve customer service, so it will be used for things like identifying that a crash has occurred and providing the customer with proactive reach-out, emergency phone numbers and emergency services if necessary.

“Initially we are coming at it from a customer services aspect. If you start to use telematics data to diagnose who is at fault, it becomes much more complicated because you enter a scenario where you have to question the data versus a human witness. We may get there some day but it’s a much more complicated solution.”

Like all things tech, onboard telematics programs and connected cars are developing in capability at a rapid rate. Soon they will be able to cut costs by evolving premiums into pay-as-you-go or by-the-mile insurance. Nationwide is working on ways to combat the all-you-can-eat culture of current auto policies so that drivers only have to pay for the miles they drive, according to Thursby. Again, a utility like this would only be possible with accurate telematics data.

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