The growing pressure on auto insurers to support improved driver safety and to bring claims inflation and prices under control will make technology increasingly central to competitiveness, according to global professional services company Towers Watson.

"Already, the recent expansion in companies offering usage-based insurance (UBI) policies, based on in-car telematics devices, is putting those companies without a UBI proposition at risk of eventually being left with the 'bad' risks, particularly among younger drivers," says Tony Lovick, director of analytics for Towers Watson's DriveAbility UBI program.

But this is just the beginning, according to Lovick. He cited the comments of Association of British Insurers director-general, Otto Thoresen, at its recent Annual Motor Conference in which he outlined five priorities for the industry in 2012, including reducing young driver deaths, whiplash claims, fraud and uninsured driving.

"Existing technologies can certainly help towards these goals," says Lovick.

As well as monitoring and providing feedback on driver behaviors, telematics devices can be used to record whiplash incidents. Other services such as automated emergency and breakdown calls are applications of the technology that would help customers and support safety objectives.

The way forward is likely to be made smoother by the increasing sophistication of onboard vehicle technologies. A number of auto manufacturers, including most recently BMW, have unveiled plans for the 'connected car' and several companies are involved in the Car Connectivity Consortium.

Mobile technologies are also increasingly likely to come into the competitive mix, according to Towers Watson.

"The launch of price comparison apps by Moneysupermarket.com and Confused.com are a sign of things to come but who says that, as vehicle wireless connectivity improves, they have to stop at pricing," says Lovick.