TELEMATICS IN VEHICLES – BIG BROTHER IS NOT WATCHING YOU


The European insurance market introduced telematics about ten years ago and South Africa followed suit by introducing it into the local market . The insurance industry then faced the challenge of overcoming the stigma that telematics will become a ‘big brother’ initiative to spy on its clients. However, most South African consumers have reacted positively to telematics and the benefits it offers.


This is according to Alma Nielsen, National Manager Claims and Underwriting at MUA, who states that there was an initial misconception among consumers that telematics will be used by insurers as a means to reject claims from the data that is collected by the telematics device.

“Consumers should not feel like they are being watched when they have telematics installed in their vehicles. The purpose of the technology is to send, receive and store data. The telematics device usually measures any form of severe breaking, harsh cornering, acceleration and speed. Due to good driving behavior resulting in lower accident risks, the insured will often be rewarded in the form of a decreased insurance premium,” says Nielsen.

She states that the application of telematics can be particularly valuable for younger drivers, as it will give parents peace of mind as data on driving behaviour is readily available. “Should an accident occur the unit will be activated immediately upon impact. At the time of the accident the Impact Analysis report will be generated and the insurer can get in touch with the client to ensure that they can be assisted during this traumatic experience. This process will enable fast and efficient arrangements to expedite the insurance claims process.”

She explains that purchasing insurance is all about measuring and calculating risks and different insurance companies evaluate the level of risk and the premium based on different elements. “When clients install telematics devices in their cars, it is the most effective and scientific way to limit and determine this risk. The data collected by the device can also monitor the driving behavior of the motorist and the insurance company can interpret this data to determine whether the client practices good or bad driving behaviour.”

Good driving behaviour ultimately results in a lower risk of incidents for the clients, which would allow the opportunity for the insurer to review the client’s premium in line with their driving behaviour, concludes Nielsen.

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