2025 could see the widespread adoption of telematics, according to Mike Brockman (pictured), CEO of insurtech company ThingCo.
Brockman, who founded ThingCo in 2018, shared his predictions for the year in a statement highlighting how telematics-based motor insurance has evolved through the years.
“The confluence of technology, economics, regulation, and consumer demand signifies that now is indeed the right time for telematics to take centre stage,” he said. “As these factors continue to evolve, telematics will not only revolutionise how insurers assess and price risk but also how they engage with and support their customers.”
According to Brockman, technological developments over recent years have set the stage for telematics to become more widespread in the insurance industry.
He pointed to how cloud-based systems are now able to offer “unprecedented speed and data processing capabilities,” which has helped reduce the cost of capturing and analysing data.
Real-time data collection and advanced geo-spatial analytics have likewise allowed insurers to “develop highly targeted risk management strategies.”
“This technological maturity provides a robust infrastructure that supports sophisticated telematics applications, transforming raw data into actionable insights,” said Brockman.
Brockman also made note of how insurance companies facing pressure to keep premiums competitive and said telematics offers a way to more accurately align premiums with actual driving behaviours.
“By identifying high-risk drivers more accurately, insurers can mitigate losses and enhance the customer experience with tailored policies,” he said, explaining that telematics provides a more granular approach to risk pricing that could benefit both insurers and customers.
Growing regulatory interest in insurance pricing models is another factor that Brockman highlighted in his analysis. Recent scrutiny of insurance practices has raised concerns over the fairness of premium structures, he said, but insurers can address these concerns by utilising telematics to improve risk assessment.
Telematics provides “data that supports more equitable risk assessment,” Brockman added, offering transparency that “not only appeases regulators but also aligns with consumer expectations for fairness and accountability.”
Going further into consumer expectations, Brockman said many have grown accustomed to having access to real-time data in other areas of their lives and want the same from their insurance providers.
“Telematics meets this demand by offering real-time driving feedback, fostering safer driving habits, and encouraging driver engagement,” he said.
A February 2024 study by The Green Insurer reported an increase in the uptake of telematics among UK drivers.
According to the study, 81% of UK car drivers are familiar with the concept of telematics. And while only 8% of those surveyed were utilising telematics devices, 35% said they’d consider adopting the technology at their next insurance renewal.
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