What is smartphone telematics (also commonly known as mobile telematics)?
Smartphone telematics is a technology designed to collect driving data. It captures trip details and driving behavior through the policyholder’s smartphone.
Insurers leverage this information by combining it with traditional customer data, such as vehicle type, age, gender, and home address. Consequently, they gain a more comprehensive dataset to accurately rate and price driver risk profiles. This approach also enables a deeper analysis of customer driving habits, supporting more precise premium assessments.
Whether you have already started to explore the potential of smartphone telematics in your organization, or you simply want to ensure you understand it fully before committing to a plan of action, this article is for you.
How does smartphone telematics technology work?
Smartphone telematics is a powerful technology since it makes use of the vast range of sensors that already exist in every policyholder’s smartphone.
Today’s smartphones include the following sensors:
- GPS receiver – detects signals from the GPS satellite network to provide location data
- Accelerometer – detects acceleration, vibration, and tilt, which together help to estimate how fast the car is moving and in which direction
- Gyroscope – can help the accelerometer to work out which way up the smartphone is, for extra precision
- Magnetometer – establishes which way is north – in conjunction with the GPS receiver and accelerometer, this can help establish location and moving direction
Data and driving insights gathered within a connected insurance policy
Behaviour-based driving data: speed, acceleration, braking, cornering, and detection of phone usage while the vehicle is in motion. It can also detect if the vehicle has been in an accident and provide detailed data around it.
Trips driving data: each time a driver commutes, the following can be captured: time, distance and length of trips.
A more enticing customer experience for the long term
When used correctly, smartphone telematics offers significant benefits for both policyholders and insurers. Policyholders receive real-time feedback, personalized coaching, and timely tips to help them recognize and address risky driving behaviors. They also gain access to renewal discounts and other rewards for maintaining safe habits, giving them more control over their insurance costs and encouraging ongoing improvement.
At the same time, insurers benefit from a safer, more engaged customer base and a reduced overall risk profile. By leveraging telematics data, insurers can more accurately assess risk, tailor premiums, and foster stronger customer loyalty. IMS specializes in delivering a personalized experience, ensuring that coaching and rewards are tailored to each driver’s unique patterns and needs. This approach helps create safer roads and a more rewarding insurance experience for everyone involved.
By adopting similar techniques insurers can therefore reduce the risk profile of their entire book of business. With the ability to influence and control the premium they pay through safe driving; they can also boost customer loyalty through improved experiences or improved pricing – and in fact both.
More accurate and more cost-effective than traditional approaches
Using telematics data in any usage-based insurance (UBI) scenario will improve decision-making and increase accuracy, when compared with traditional insurance variables that are not always indicative of actual driving behavior. As an example, British auto insurer and IMS customer, Carrot Insurance achieved a reduction in Combined Operating Ratio of more than 10% based on using telematics data to detect and improve driving behavior.¹
Data derived via smartphone telematics programs can improve risk scoring significantly, since you are including actual driving data when making risk predictions and pricing decisions.
You can achieve all this by creating a new app from scratch or by using an SDK – embed telematics capabilities into an existing insurance app through APIs.
Conclusion: Mobile telematics is a solid way forward
Customers expect more control over what they pay and insurers have, at the same time, come under greater scrutiny regarding the fairness of their risk scoring models, the time has come to focus on the way each customer actually drives.
Smartphone telematics is also fairer and more cost-effective when it comes to calculating policyholder risk. And crucially, it gives you a platform for boosting driver engagement, so you can influence behavior as well.
Today, the most advanced insurers take customer engagement very seriously, implementing coaching, real-time messaging and positive reinforcement rewards programs that are proven to improve driving behavior, prevent accidents and save lives, all while making users less likely to claim. Ultimately, this is the goal of mobile telematics.
To read more about our work with Carrot, see the complete case study here.
To learn more about making the most of mobile telematics, read The top 5 best practice examples for mobile telematics success next.
About IMS
IMS is a global leader in connected insurance solutions, leveraging advanced telematics to support smarter pricing, customer engagement, risk management, and claims efficiency. With operations across the UK, Europe, and North America, IMS has analyzed over 40 billion driving miles, delivering insights powered by trillions of data points. Learn more: https://ims.tech
About the IMS Engagement Toolset
The IMS Engagement Toolset is the industry’s most comprehensive suite of engagement tools and techniques. Leveraging telematics data, it is proven to modify driving behavior and generate desired business outcomes, to drive down loss ratios.
It gives you complete control over the ways in which rewards are earned, distributed and fulfilled, offering end-to-end digital interaction. You can deliver messages on a one-to-all, one-to-many or one-to-one basis, including text, images and rich media. By enabling you to set up leagues, leaderboards, achievement milestones and badge systems, it makes a compelling proposition for customers – and it works. 56% of customers receiving the messages check their scores daily, with 88% checking weekly. Overall, they are 39% less likely to have an accident. As a result, a 1-2% premium in investment in Rewards will lead to an estimated 7% COB program benefit, with a 1.7% premium will lead to an estimated 3x ROI, through improvements to claims loss ratios.
Learn more about the IMS Engagement Toolset at https://ims.tech/engagement/
About the IMS One App
The success of any mobile telematics program depends in large part on the customer experience, much of which is necessarily delivered via a smartphone app. With the IMS One App, you can offer a personalized experience tailored to product usage and the customer journey – crucially including their actual driving journeys.
One App is a development framework that makes it quick and easy to create scalable, configurable telematics apps that are proven to work, leading to measurably higher levels of engagement than apps created via other means. One App can help you truly connect with your customers, changing their driving behavior to deliver better outcomes, both for your business and for them.
Learn more about the IMS One App at https://ims.tech/oneapp/
¹ Carrot Insurance – Rewards Program Case Study: https://ims.tech/resources/carrot-insurance-rewards-program-case-study/
² Carrot Insurance – Rewards Program Case Study: https://ims.tech/resources/carrot-insurance-rewards-program-case-study/
³ Onlia Sense – Telematics SDK Case Study: https://ims.tech/resources/onlia-sense-telematics-sdk-case-study/
