Cambridge Mobile Telematics, a leading mobile
telematics provider, recently purchased TrueMotion, one of its rivals and another leading smartphone driving platform powered by machine learning.
The acquisition brings together two leading telematics companies in a very rapidly growing industry.
How telematics work
Mobile telematics and analytics are fairly new concepts that didn’t exist not too long ago, but now it’s changing the way insurance premiums are calculated.
Traditionally, car insurance companies have used factors like age and
credit scoreto determine premiums. But now, telematics allows insurers to directly collect information about driving habits to determine prices paid by individuals.
Telematics works by measuring behaviors that cause car accidents, such as phone distraction, speeding and a pattern of hard braking, which could indicate low focus.
In addition, drivers can control their telematics-based risk factors, reducing their crash risk and possibly lowering their premiums with incentives and structured feedback.
Business Wire, mobile telematics is estimated to become a $125 billion market in the next five years, helping to power the next generation of digital car insurance.
Cambridge Mobile Telematics uses a combination of sensor fusion, artificial intelligence, and behavioral science to measure driver risk and offer real-time crash assistance.
The acquisition reportedly will help strengthen Cambridge Mobile Telematics’ ability to help modernize emergency response to a car accident, as well as the claims process.
Real-time crash detection and AI-based crash reconstruction technology, from both companies, means that roadside assistance can be dispatched within seconds of a crash, and organizations can receive detailed information about a crash within minutes. The technology can also improve damage assessment for insurance claims.
Cambridge Mobile Telematics also says the acquisition will combine the talents of both companies to invent new products for risk measurement, contextual telematics, and crash mitigation.
Measuring driver behavior vs credit scores
Telematics may also help price car insurance premiums more fairly. Some argue that using credit scores to determine insurance premiums is unfair, because it’s not taking into account how safely someone drives.
In fact, the car insurance industry has used credit history to help determine a driver’s risk since the ‘90s, according to
USA Today. Some even argue that lower credit scores can particularly make car insurance pricier for Black, Latino, and Indigenious Americans, because these groups are more likely to have low credit scores due to systemic challenges, according to consumer advocates.
But telematics is poised to change that practice, by examining exactly how someone drives, and assessing accident risk rather than credit history.
Consumers seem to agree with this shift. According to USA Today, 82% of respondents of a Root Insurance survey believe that driving history should be the primary factor in determining insurance premiums, while only 6% think it should be credit score.