Real-time driving data allows insurers to offer accurate, affordable premiums while improving safety. This shift is vital as rising insurance costs challenge consumers, paving the way for safer, more cost-effective solutions
Auto insurance costs are soaring. According to the Consumer Price Index (CPI), motor vehicle insurance costs in the U.S. have surged by 50% from July 2021 to July 2024. In July 2024 alone, there was a 19% year-over-year increase. In this challenging market, telematics and AI have emerged as a game-changer by enabling insurers to analyze real-time data on vehicle usage, and offer more accurate, behavior-based based pricing models.
What is Telematics?
Telematics systems gather comprehensive data on how vehicles are driven, including speed, braking patterns, and cornering habits. Using this vehicular data, AI can assess the risk associated with individual drivers more accurately. This allows insurers to assess risk based on actual driving habits, moving away from traditional, demographic-based pricing models. This shift offers several benefits:
- Reduced Premiums: McKinsey reports that fleets using telematics can see up to a 25% reduction in insurance premiums.
- Improved Safety: Real-time data encourages safer driving behaviors.
- Accurate Pricing: Behavior-based pricing models are more accurate and fairer.
Telematics in Action
Human error accounts for over 90% of road accidents, with common causes including mobile phone distractions, drowsiness, and poor situational awareness. Roadzen confronts these issues through AI-driven proactive driver engagement. Our platform leverages telematics and behavioral data to provide real-time alerts and coaching, fostering safer driving habits. By integrating driver monitoring and advanced driver-assistance systems (ADAS), we can significantly reduce accidents caused by human error.
This approach not only saves lives but also lowers insurance costs by reducing the frequency and severity of claims while enabling usage-based insurance (UBI) products that reward safe driving with lower premiums. Insurers can offer fairer, more affordable premiums while promoting safer driving habits.
Ultimately, our solution not only addresses rising insurance costs but enhances road safety through comprehensive driver training and support.
For more information about Roadzen’s AI-powered solutions, write to us at info@roadzen.ai or visit roadzen.ai/products/mantis
