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Usage-based Insurance (UBI) also called Pay As You Drive (PAYD) helps insurance providers to look at details to work a risk assessment and a reward based pricing on it. It allows them to deploy multiple engagement models to lower customer attrition and increase customer experience.

Further, UBI products from data providers like CerebrumX help Insurance providers with data insights for FNOL, accident reconstruction, claim settlement and resolution besides other risk assessment functionality required data.

An effective UBI program, aimed towards reducing risk and promoting driver safety, generally requires multitude of real time data signals from the connected vehicle – such as accrued mileage, engine status, odometer readings, driving behavior, relative vehicle speed, seatbelt indicator, ADAS signals etc.

In this blog we will focus on the differences between embedded telematics solutions & mobile based telematics under the lens of access, accuracy, reliability and vulnerability and determine why embedded telematics solutions are better than mobile based solutions.

Data Operations / Vulnerabilities –

An embedded telematics system sufficiently automates retrieval of key vehicle parameters as opposed to the intrusive mobile based systems. For a mobile based system, the mobile must be always switched on with adequate battery power and the driver must manually activate tracking each time they begin the trip. Such data cannot be relied upon for accuracy in information, if the driver forgets to switch on the device or deliberately turns it off with the motive to conceal data. Embedded systems, thus, helps the insurers keep a check on the driver activities and avoid the possibility of potential frauds.

Data access–

Embedded telematics enables access to a wide range of sensors present in the connected vehicles that provide detailed and granular level of data required by the Insurance companies to monitor the driving patterns. A mobile based telematics unit, on the contrary, has access to a limited dataset which lacks access to critical Trip data signals and is only limited to GPS tracking.

Some of the important trip data signals missed by mobile telematics data are –

      • Ignition data – This helps the insurers monitor the activities of the vehicle and the driver right from the moment when the trip is starte犀利士
      • Odometer rating – These readings measure the distance travelled by a vehicle. The insurers use this data to decide appropriate prices based on the miles travelled.
      • Engine coolant temperature – These readings indicate the temperature at which the engine is running. It warns about engine overheating to protect it from damage. This helps the insurers assess the health of the vehicle.
      • Engine RPM – Revolutions Per Minute (RPM) in a vehicle indicates how fast the engine is operating at a given time. Regulated RPM helps the drivers keep the engine and fuel efficiency in check, maintain the vehicle and save the overhead premium costs.
      • Seat belt reminders –  These notifications help the drivers detect whether seatbelts are in use and sends urgent warning signals until the belts are used. This helps the drivers to maintain a good driving behavior.
      • Battery warning and other warning lights – These notifications indicate the drivers about the battery status of the vehicle. If the charging is low, the driver should immediately charge it to avoid the vehicle breakdown. Such notifications help the drivers to keep the vehicle performance high.

Data Accuracy –

Embedded devices onboard the vehicle have deep integrations to the vehicle with access to all vehicle components. Accurate real-time insights are important for the insurance companies to monitor the driving behavior of the car owners. Given that the information is reported directly from the vehicle, as opposed to the mobile based system, they provide exceptional data accuracy to the Insurance companies.

Mobile based telematics systems have been, historically, very vulnerable to deliberate frauds by drivers. Accurate data reporting is very critical for Insurance companies to assess an optimum premium, to identify and avoid fraudulent claims.

Latency –

Insurance companies require a low-latency source of information like traffic, speeding, vehicle maintenance, etc. to be updated instantly and regularly without any delay so as to ensure timely monitoring. Insurance companies can also use the embedded vehicle data to identify any suspicious activities on the cars and can take timely actions to inform the police and the owners. Embedded telematics solutions are proven reliable and low-latency source in comparison to mobile based telematics systems.

How can CerebrumX help your business?

Accurate and real-time data enables Insurance companies to design dynamic pricing models and differentiated products like Pay as you drive (PAYD) and Pay how you drive (PHYD) policies with real-time insights. CerebrumX, a leading provider of Deep Learning and AI based connected car Data Management Platform for the global Automotive industry offers the ideal solution to insurance companies to build advanced self-learning models for vehicle health and driver behavior that are core to UBI.