Editor's note: Jim Sadler is CIO of Xchanging.

The joys of the open road. The wind in your hair. Just you and some music on the radio. But are you really alone in the vehicle? Increasingly, we're accompanied on our travels by a little black box, or even our own smart phones masquerading as little black boxes, betraying our driving style and habits back to some unseen data warehouse.

Meet your new co-driver: telematics. No longer just a techno nerd's laboratory experiment, telematics—simply defined as the use of wireless devices to transmit data in real time back to an organization—is becoming big business in the automotive industry, and has the potential to transform the entire insurance business across almost every personal and commercial line.