While many nations have embraced telematics and usage-based insurance (UBI) to good results, Canada has been taking a more cautious approach. Telematics are becoming more common, but strong data on benefits or demerits of the technology. However, the country’s largest P&C says telematics have been successful.
Telematics are vehicle diagnostic devices or software that collect driver and vehicle-related data to assess the level of auto insurance premium. Among the factors assessed by telematics devices are speeding, distances travelled, frequency of vehicle use, hard braking, and acceleration.
Drivers who are willing to adopt telematics can receive discounts, while further cuts in premium are available if safe driving habits are observed. Furthermore, telematics are used in usage-based insurance, where drivers only pay insurance when they use their vehicle.
“For us, it’s a big success,” Louis Gagnon, president of Canadian operations for Intact Financial Corp., said. “For sure, there is a world of difference between people who are on UBI and people who are not on UBI.”
Gagnon spoke at the Property Casualty Underwriters Club CEO Luncheon in Toronto, although he did not offer hard data on Intact’s telematics use. The company has been selling UBI to customers since 2014, making it one of the first to use telematics devices in Canada.