The car insurance industry has offered telematics devices for a few years now, giving policyholders the chance to save money on their premiums by demonstrating that they drive safely.
But now a US-based startup is preparing to shake up the industry after raising $10 million (£6.4 million) to roll out its telematics platform which works from a customer’s smartphone.
Usually, customers who take out a telematics insurance policy will have a black box fitted to their car or van. This device monitors where and when they drive, as well as how they handle the vehicle, giving the insurer an insight into whether the driver is on the road in rush hour or late at night, or drives at at high speed, or brakes sharply and frequently.
Driveway Software’s smartphone-based telematics platform is different because it doesn’t require a special device for the vehicle. That makes usage-based insurance accessible to more insurers, not just the big names with big budgets.
According to the company, its iOS and Android app is able to differentiate between policyholders driving their cars and those riding in others’ cars or travelling on public transport.
The platform — a hybrid of telecom and vehicular technology — tracks car data such as mileage, acceleration, braking, cornering, speeding, and the time, day and location driven. This information is stored in a secure cloud for analysis, and good drivers are rewarded with lower rates.
“Since we launched five years ago, our smartphone app, Drivewise.ly, has collected over 500,000,000 miles and rewarded more than 250,000 drivers,” said Igor Katsman, founder of Driveway.
“The new funding is a recognition that mobile telematics is becoming a ubiquitous part of our everyday lives. Our state-of-the-art technology has removed the barriers that existed with legacy telematics solutions. Customers can be engaged like never before, with resulting big data yielding unprecedented levels of actionable insights.”
Driveway Software plans to use the new funds to strengthen its position, create new markets for telematics solutions and grow the company’s team. The funding round was led by Russian billionaire and Chelsea FC owner Roman Abramovich of Ervington Investments.
Usage-based insurance needs to pay off, and the fixed cost for installing a black box or an OBD dongle has so far deterred most European motor insurers and their customers. As more technology options become available, we will see a breakthrough in several EU markets over the next five years. Additional efficiencies could be reached if the car companies allowed the use of the in-vehicle hardware for third-party services. EU competition law mandates the access to essential facilities, such as data ultimately needed for repair or maintenance. The current reform of the type approval regulations will likely strengthen the right of independent providers to provide remote diagnostic services. Regulators need to strike the right balance, effective competition needs to be achieved without compromising privacy or road safety.” Thomas Funke, Partner and Head of Automotive OC Germany
Tags: Smart phones