text: Telematics can be used by insurers to capture and monitor data related to driving habits and many countries such as China, Germany and Singapore already leveraging this technology to better price motor insurance premiums. It is simply a method of monitoring an individual’s vehicle through a global positioning system (GPS) device fitted in an individual’s vehicle. The device monitors and captures data related to an individual’s real-time driving habits and consequently can help in determining the amount of motor insurance premium he/she will have to pay. Safe drivers can be incentivized by lower premiums, while risky drivers can be deterred through higher premiums.
  According to the Insurance Regulatory and Development Authority of India’s draft proposal, a central repository of telematics data can be created where data from various sources flows to create a common pool. Insurers can then use this pool of data to delink proxy data from source data, thereby, enabling them to provide pricing that rewards safe drivers. There are also companies overseas that are leveraging AI-based devices for creating a dynamic pay-per-mile underwriting system to monitor miles, jerks, collisions, speed patterns, etc. This data is then used to calculate the insurance premium.
  At a time when customers have come to expect customized solutions, pricing premiums to reflect an individual’s unique risk has become imperative. Technology is allowing insurers to assess and monitor risk on an individual and real-time basis, thereby, helping insurer’s price premiums more accurately and keeping their customers happy.