The number of insurers across all sectors using telematics—a portmanteau of telecommunications and informatics—will jump in the coming years as companies seek to boost profits by recruiting, rewarding and retaining their most lucrative members.
Health insurers have taken first steps toward the technology by gathering data from wearables, smartphone apps and devices such as bluetooth-enabled scales. But while healthcare and other insurers are on pace to catch up, the auto insurance industry has been out ahead on this one.
RELATED: mHealth roundup--Health apps to cut costs, improve care
Progressive, for example, said its telematics-based 'Snapshot' device program allows it to "attract, identify and reward good drivers while also retaining those customers longer," according to a Reuters article. Progressive has more than 2 million Snapshot policies in force, about a fifth of its total U.S. auto business.
And Johannesburg-based financial services firm Discovery Ltd, whose car insurance unit has been tracking customers' driving and using the information in pricing since 2011, said it has seen a 10% drop in accident claims since then, according to the article. Its ratio of losses to premiums for drivers in the tracking scheme is more than a quarter lower than those not participating.
RELATED: Data, policy changes, value-based care are top of mind for health plan leaders in 2017
Data can also upend conventional wisdom about which members are riskiest.
"The whole beauty is that someone who might be seen to be a bad risk can turn out to be a good risk," Anton Ossip, CEO of Discovery Insure, the company's auto insurer, told Reuters.