The principle of this new approach is that the insurance premium is calculated based on the individual driving style of the client.
According to research, the automotive telematics market is expected to grow to $16.1 billion by 2030, up from $9 billion in 2024. This raises the question: how effective and beneficial is it to use telematics for auto insurance? In this article, we will explore how the smart mechanism works and what advantages it can offer to drivers and insurance companies.
What is telematics and how does it work?
The foundation of telematics solutions consists of devices operating on the Internet of Things (IoT) that are installed in vehicles and continuously collect data about the driver's behavior and the operating conditions of the vehicle. These devices record parameters such as speed, frequency and intensity of braking, acceleration and maneuverability, usage time, and road conditions.
The collected data is transmitted to insurers, who can use it to more accurately assess the risks associated with a particular driver's behavior. Based on this information, personalized insurance rates are formulated that fairly reflect the level of risk for each client. As a result, careful and responsible drivers have the opportunity to significantly save on insurance premiums, while insurers minimize risks and enhance the profitability of their products.
Why is telematics better than traditional insurance?
Traditional auto insurance methods rely on general criteria such as the driver's age or the type of vehicle. However, they do not take into account individual characteristics and driving behavior, which often leads to unfair rates. An individualized approach to risk assessment allows drivers to save significantly on insurance premiums. For example, responsible drivers who adhere to traffic rules can expect substantial discounts. Moreover, clients can choose only those coverage options that are most relevant to them, making insurance not only fair but also fully personalized.
The implementation of telematics helps insurers optimize processes and improve business efficiency. Utilizing precise data allows for more accurate risk assessment, reducing costs and increasing product margins. Additionally, telematics solutions contribute to attracting new customers who gain access to innovative insurance products. The reduction of fraud risk due to the transparency and accuracy of data strengthens the company's position in the market and enhances its reputation as a leader in the insurance sector.
Who provides IoT solutions in Kazakhstan?
In the Kazakhstani market, telematics solutions are also beginning to occupy an important place, offering drivers and insurance companies all the advantages of smart technology. One of the leaders in providing IoT solutions is Beeline Kazakhstan. The company not only actively develops the infrastructure for telematics but also offers innovative products that meet global standards.
Beeline Connected Cars is a comprehensive solution for fleet management and vehicle monitoring. This service offers unique opportunities for optimizing expenses and enhancing safety, providing real-time monitoring, online vehicle diagnostics, accident recording, and much more. Connecting through the Beeline Connect platform allows insurance companies and fleet owners to effectively manage the technical condition of vehicles, minimize accidents, and reduce maintenance costs.
"Implementing telematics through our Beeline Connect platform allows insurance companies not only to assess risks more accurately but also to offer clients fairer and more personalized rates, which helps increase loyalty and customer satisfaction," says Turar Ospanov, Director of New Solutions Development at Beeline Kazakhstan.
Key advantages of Beeline Connected Cars include:
● reduction of maintenance and fuel costs;
● minimization of accidents and improvement of driver discipline;
● assessment of eco-driving, which helps gather data on speed limit violations and other parameters affecting safety and insurance costs.
Furthermore, clients of Beeline Connected Cars gain access to data about their driving, allowing them to analyze their habits on the road and improve them. This not only helps save on insurance premiums but also contributes to increased overall safety on the roads.
"We are actively developing smart technologies in Kazakhstan, creating local solutions that help our clients find the most advantageous offers. Our goal is to enhance local potential and strengthen Beeline's leadership in the IoT sector, ensuring safety and efficiency on the country's roads," shared Turar Ospanov.