Creating Personalized Risk Profiles for Auto Insurance
Car insurance premiums are typically determined using previous claims history, car make, model and age, and the insured’s driving record. Insurers also take into account driver demographics like age and location as an input to premium computation. The traditional methodology of using historical information is akin to driving using a rear view mirror. The IoT revolution provides an elegant solution to develop a granular, personalized and current risk assessment using telematics devices installed on vehicles. These devices wirelessly transmit information on a key parameters, including the number of miles driven, driving speeds, hard braking, sharp cornering and time of the day. This information can be analyzed to determine driving patterns and rate driver performance as an input to compute insurance premiums.