Insurers expect that telematics will start to impact on claims levels over the next decade.

This will result from increased profiling of driver behaviour which correlates to the likelihood of collision.

Telematics is also likely to provide both insurers and fleet operators a robust defence against fraudulent claims.

Fleets overlook financial considerations

Price adds: “Every time there’s a crash, there are many financial considerations that are overlooked by fleets – from absenteeism to penalty clauses for late servicing.

“Telematics offers companies the opportunity to monitor and control issues like these and, in addition to fuel consumption, that’s where the biggest gains are to be found.

However, he says uptake has been slow, partly because different parties within organisations often want different information from telematics.

As a result it can take as long as 18 months to implement depending on the size and nature of the fleet.

Price says many of Zurich’s clients see the technology as an enabler because it provides them with the data they require to manage their fleets more effectively.

He believes that while manufacturers would fit telematics as standard, it is unlikely to occur until the issue of standardisation has been overcome.

Crane says: “It seems highly probable that telematics will be built into vehicles in some way in the future. It clearly has both proactive uses where drivers’ behaviour is being managed and reactive ones, which rotate around claims management.

“It has the potential to quickly enable us to get the details of what’s happened if an accident occurs, as well as finding out who’s at fault.”

But, he warns: “Just because a younger driver might have telematics fitted in their vehicle, it doesn’t automatically make them a better driver.”

ABI 'in discussions' over telematics use

Association of British Insurers (ABI) spokesman Malcolm Tarling says the future of telematics remains of great interest to all its members.

He confirmed the ABI is in talks with interested groups about the future.

Tarling explains: “While the ABI cannot predict the growth of telematics generally, in the motor insurance market there does seem to be the impression that its use is increasing, particularly in the fleet market.

“We are discussing this issue with our members and other interested groups.”

Tarling says the issue of young drivers remains of particular concern to insurers, but the consensus is that education rather than telematics is the best solution.

He adds: “There is increasing concern over rising insurance premiums that younger drivers are facing. This is because it reflects their high crash rate.

“The ABI is proposing a minimum learning period which would have greatest benefit in improving their safety and ultimately lead to a reduction in their insurance premiums.”