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Based on past driving records, ?safe driver? discounts offered by auto insurance companies have delivered welcome benefits for both drivers and insurers. Now insurers are taking things a step further, tapping into real-time driving data to optimize rates and discounts. Known as ?telematics,? this transmission of vehicle data can give auto insurance companies a more accurate read on what kind of drivers their customers really are – and the potential costs to cover them.
Mixed Emotions
While insurance companies have much to gain from leveraging real-time automotive telematics, the majority of consumers aren?t eager to cooperate. In a recent Deloitte report, 74 percent of survey respondents said they would be somewhat reluctant or outright refuse to allow their driving behavior to be monitored. 31 percent of individuals said they would be open to sharing data with the caveat that they received a discount greater than 20 percent – a tall order for insurance companies looking to use driver data. This consumer hesitancy, along with associated regulation, is hindering insurers from taking full advantage of the data provided by telematics. Instead, insurers are developing ?opt-in? programs to capitalize on willing participants and further explore how this data can influence their current business models.

Promising Avenues
Additionally, insurance isn?t the only sector of auto services that stands to benefit from t...