Cambridge Mobile Telematics, one of the largest technology companies focused on the growing business of collecting information about individual driving behavior directly from their vehicles, has bought TrueMotion, one of its competitors.
Existing telematics technology relies heavily on smartphone apps that evaluate behaviors such as hard braking, overspeeding, and acceleration patterns, and some technologies also monitor distracted driving. Auto insurers’ use of the technology has grown significantly in recent years due to its ability to identify safer versus riskier drivers.
For decades, insurers have used factors such as age and creditworthiness to determine the prices individuals will pay. Today many claim that driving behavior is a fairer measure of a person’s risk of accidents.
In a deal expected to be announced early Thursday, Cambridge Mobile announced it had completed the purchase of TrueMotion at an undisclosed price. Following the merger, Cambridge Mobile will provide telematics services based on premiums to 21 of the top 25 auto insurers in the US, serving some of the largest auto insurers in Australia, Canada, Japan, South Africa and the UK
Subscribe to Newsletter
Markets
A pre-market primer with news, trends and ideas. In addition, current market data.
The deal paves the way for the two companies in the Boston area to pool their employees in order to improve existing offers to auto insurers and to invent new products. Together they employ almost 400 people, many of them computer scientists, data experts and engineers.
With typical insurers’ telematics programs, customers who sign up are initially billed for premiums based on traditional assessment factors such as age, gender, vehicle type, creditworthiness, vehicle violations, and estimated number of kilometers traveled. But insurers also usually grant policyholders a small discount in advance as an incentive to try out telematics. The discount increases or decreases depending on the driver’s performance. Most insurers don’t raise tariffs for people who test as bad drivers, industry analysts said.
Each of the two telematics companies has developed machine learning algorithms, and each has significant amounts of data and processing power.
“Combining all of these things will accelerate the development of new telematics features,” said Harry Huberty, director of research at Novarica, an insurance and technology research and consultancy firm.
Cambridge Mobile was founded in 2010 and received $ 500 million in funding from SoftBank Group corps
9984 -1.40%
Vision Fund in 2018. Its clients include State Farm Mutual Automobile Insurance Co., the country’s largest private auto insurer by premium volume.
TrueMotion was founded in 2012 and has received more than $ 80 million in funding from investors such as General Catalyst and Bain Capital. It drives progressives corps
PGR -0.90%
including a mobile telematics program.
“
One of the objectives of the transaction is the “development of telematics application options in the claims process”.
”
Commenting on the objectives of the transaction, Hari Balakrishnan, Cambridge Mobile co-founder and chief technology officer of the expanded company, said: “To develop telematics capabilities for the claims process. This includes artificial intelligence in telematics data to reconstruct crashes and provide an unbiased history of the incident. “
Another focus will be on finding ways to assess the quality of the sensor data from autonomous vehicles, algorithms and artificial intelligence software, said Ted Gramer, who was TrueMotion’s CEO and will be the combined company’s chief operating officer.
Brian Sullivan, founder and president of insurance consulting and conference company Risk Information Inc., said the deal reflected a broad belief in industry that “auto insurance rates will ultimately depend on how people drive,” with one shrinking role for many traditional factors. He said there were consumer privacy concerns about using telematics, “but with each passing day we wear one [smartphone] Tracking device in our pockets with location services switched on. “
State regulators examine the use of credit, education, and occupation to determine automobile insurance premiums for possible racial discrimination. Many states allow these factors to be actuarially reasonable, although black Americans are overrepresented in lower credit rating categories and underrepresented in higher educational levels and some professional careers preferred by insurer methods.
Write to Leslie Scism at leslie.scism@wsj.com
Copyright © 2020 Dow Jones & Company, Inc. All rights reserved. 87990cbe856818d5eddac44c7b1cdeb8
source https://collegeeducationnewsllc.com/cambridge-mobile-buys-rival-as-telematics-helps-set-car-insurance-payments/
No comments:
Post a Comment