Telematics will become an integral part of the auto insurance, says the President and CEO of The Guarantee Alister Campbell - but the transition to full integration won’t happen overnight.
“The (telematics) models that are out there, it will take some years to differentiate between the good and the bad,” says Campbell. “And the adoption rate will be slower than people think.”
Like other insurers, The Guarantee is eagerly testing and moving forward on telematics. But Campbell doesn’t see the devices simply being attached to the vehicle and the data immediately incorporated into driver rating without a few more years of testing and trial and error.
Look for the exclusive interview with Alister Campbell in the May issue of Insurance Business magazine
“There is a learning curve here that could be lengthy and costly,” says Campbell. “We’ve had brokers involved in an internal pilot telematics project, and we’ve have seen the power of the tool; and the downsides of it – namely privacy.”
Campbell cites the reluctance of some people to share the data and positional location that telematics devices gather and transmit to the insurer, such as the ‘last location.’ He also sees the need to nuance the information being gathered, as some data that may appear similar between two drivers, but do not portray an accurate picture of who is the ‘safe driver.’ (continued.)
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“For example, you have two people driving 120 km/h on the (Highway) 401.” Campbell told Insurance Business. “One is dangerous, the other not – but both listed as ‘dangerous.’ I know from personal experience, I was driving my wife’s car that had a telematics device in it, and I was going to accelerate onto the highway to safely avoid traffic – but I didn’t, because it would have been recorded as a ‘sudden acceleration.’”
But that hasn’t deterred Campbell from moving forward on telematics – or even bringing that technology to the highest levels of The Guarantee.
“I’ve installed it in the vehicles of the senior management team,” says Campbell. “Telematics is the future of auto insurance.”
