Impact study of telematics auto insurance
Impact study of telematics auto insurance

Summary/Abstract: The development of telematic systems, as well as the need to differentiate the motorinsurance market, led to the emergence of new clauses in motor insurance contracts. Thus,vehicle insurance contracts with self-check (and telematic) insurance policies are in therecent focus of insurance companies for motor insurance. With the help of a telematicsdevice installed on the vehicle and a mobile application the driving mode of the driver ispermanently assessed; the rating is calculated according and the discount for the insuranceprice is set accordingly. These types of auto insurance contract terms can provide, onaverage, 25% savings for carefully drivers.Our paper presents, the recent developments in telematics insurance in Europe and aroundthe world and the Romanian drivers propension to accept the monitoring of their drivingbehavior. We then present the economic, financial and socio-ecological advantages versusdisadvantages revealed by specialized literature for both policyholders and insurers. In thiscontext, we will prefigure the future of telematics insurance in Europe.In our empirical study we estimate the financial impact of telematics insurance in Romaniaon gross written prices and gross paid indemnities. Finally, we estimate the socio-economicimpact of these telematics insurance on the decrease in the number of kilometers, fuelconsumption, number of accidents and casualties, and implicitly, on the reduction of thecost of the compensation. For this impact study we used the scenario technique(pessimistic, moderate and optimistic) in relation to the baseline scenario, respectively, theestimate of the natural evolution of the insurance market in the absence of telematics.

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