"Telematics and event data recorders (EDR) should be on every insurer's radar," said research and consulting firm Celent in its 30-page report titled "Vehicle Data and Telematics: What Does the Future Hold for the Insurer?" Coauthored by Catherine Stagg-Macey and Ashley Evans, senior analyst and analyst at Celent (respectively), the report explores how insurers should not only apply these technologies to assess claims more accurately and potentially drive down costs, but also improve risk management.

Within the context of the motor industry sector, EDRs are the most heavily adopted of available data recording devices — also composed of trip-logging, GPS, and telematics — largely because of the prevalence of airbags designed to record pre-crash data. In fact, Stagg-Macey and Evans said that in the U.S. alone, more than 65 percent of post-2004 vehicles are equipped with an airbag control module with EDR capability.

EDRs document the seconds leading up to a crash, not driver performance over an extended period of time. Though limited, this amount of information can be significant when assessing claims because adjusters can chart the speed, brake position, airbag deployment status, and the velocity changes of an insured car at the time of an accident. According to Celent, these capabilities hold the greatest potential for commercial fleet insurers and personal motor insurance limited to niche products.