Telematics Data – Changing The Insurance Underwriting and Actuarial Environment

Telematics and specifically the usage based data it generates, significantly improves the ability to rate and price automobile insurance, by adding a deeper level of granularity to the data commonly used today.

Companies in the forefront of using telematics data, are beginning to understand the value of its many indicators as they relate to policyholder driving behavior, and how that behavior positive or negative, directly affects overall policy administration cost.

This advantage though, also comes with a possible disadvantage – higher volumes of data being added to already burdened processing resources. A single vehicle generates approximately 2.6 MB of data per week.  If 50,000 auto policies are on the books, accumulating that data for a year results in 6.8 TB per year.

Pay How You Drive Data

Given that the use of telematics data from automobiles is on the rise in insurance companies, to be followed by telematics data generated from wireless sensors in personal and commercial use; a solution for processing huge volumes of data quickly is indicated.

Most likely that solution is SAP/HANA based, processes the data and analytics together in main-memory, provides underwriters and actuaries a technological advantage to their business – real-time rating and pricing, a solution that doesn’t exist with traditional methods.

Jim Janavich

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