Telematics-Based Driver Scoring
Background
A European insurer launched a voluntary telematics program to modernize underwriting and strengthen customer engagement.
Approach
- Customers opted into a 6-month program using OBD-II devices.
- Driver scores calculated from mileage, braking habits, and time-of-day driving.
- Incentives:
- Initial discount after 1 month.
- Renewal discount (up to 30%) after full 6-month
Key Interventions
- Transparent driver scoring shared with customers.
- Positive reinforcement through discounts for safe driving.
- Behavioral data fed into underwriting models.
Results
14B+ miles of driving data analyzed.
2.5M+ active users enrolled across the portfolio.
~1/3rd of customers opted in.
Telematics data proved 2× more predictive than traditional rating factors.
Worst drivers cost 2.5× more than the best performers.
Impact
The program strengthened customer loyalty, improved loss ratios, and validated that behavioral data is a superior predictor of risk compared to traditional models.
