New telematics startups crop up every day. However, when choosing a telematics partner to power a UBI program, you should be more data-focused and consider factors such as the following:

• Does your partner meet international standards and certifications?
• What is the company's experience in doing so?
• What levels of system security and data protection standards are available?

Anyone can gather data; however, only the most experienced telematics providers — those who meet strict standards and know to analyze the data and put it into action for insurers — will dominate the market.

Telematics for value-added services

Telematics offers so much more than simply driving scores for UBI discounts. Although it's useful for analyzing driving for better rates and delivering personalized driving tips to improve safety, it can also make any vehicle a "connected car," providing additional benefits and communications for drivers.

These can include alerts to road conditions on your route, weather hazards or vehicle maintenance needs, as well as on-demand assistance from your insurer in the case of a crash. Such offerings ensure that help is dispatched immediately, the claim is processed faster, and policyholders can get back on the road quickly. They also help insurers to cut down on fraud and false claims.

Here's a look at eight ways telematics will continue to shape the insurance agency in 2017.

(Photo: iStock)

1. Telematics drives vehicle-embedded connectivity

It's been forecast that by 2020, 90 percent of cars will have embedded connectivity, and all cars will be connected by 2025. In the meantime, telematics can make any vehicle a connected car today, and new opportunities for telematics arise even with the growing popularity of autonomous vehicles. There will be a stronger need to collect and analyze data from the connected, autonomous car, which includes not only the information that comes from the car itself, but also the information that comes from the contact, that is, the contextual data.

For now, fully self-driving cars are far from being mainstream. While we move toward their adoption, telematics will continue to make any car a "connected car," able to provide game-changing safety gains if human drivers improve their behaviors: less tail gaiting, no driving while under the influence, obeying speed limits and other traffic laws, and other high-scoring behaviors that telematics can continue to alert and educate drivers — and insurers — about.

Related: How self-driving cars will change the rules of the road

2. Telematics creates better drivers

U.S. traffic deaths jumped an estimated 10 percent to 17,775 during the first half of 2016 compared with the year-ago period, according to the National Highway Traffic Safety Administration. With telematics educating drivers on their dangerous behaviors and making them more conscientious than ever, drivers are expected to tailgate less, speed less and drive more carefully overall. Thousands of lives could be saved by preventing crashes caused by driver-related factors.

Insurers will see a benefit to the bottom line. Better insights and better driving will mean fewer claims for insurers and fewer accidents for drivers. UBI programs and telematics aren't only good for discounts, they're also good for education on smarter driving and road safety.

Related: 10 most ticketed cars by model, percent of vehicle owners

(Photo: AP/Steve Helber)

3. Telematics improves road safety

While driving patterns will improve over time, evident in drivers' improved scores and change in patterns such as less hard cornering, hard braking and tailgating, telematics will also improve road safety and awareness.

With weather alerts, road condition alerts and even monitoring a driver's alert level, this technology will continue to make our roads and infrastructure safer and improve the relationship between consumers and insurance companies.

Related: It's winter! Do you know the biggest risks on the road in your region?

4. Telematics lowers claims costs for insurers

Telematics insurance policies, on average, result in 50 percent fewer claims vs. non-telematics policies, according to a study from the Ptolemus Consulting Group. Moreover, the information and improved first notice of loss timing and control have the ability to improve the claims management process and reduce it by 10 to 15 days. Data analytics will be critical to understanding what happened and determining liability as the automotive industry evolves — even if a driverless car collides with a pedestrian.

With telematics cutting down on fraudulent claims, insurers will also see a benefit to the bottom line. For example, in 2014, on average, our solutions at Octo reduced claims management costs by an unprecedented 25 percent and cut claims processing time by 40 percent.

Related: It's time to curb auto claims' driving force 

(Photo: Thinkstock)

5. Insurers focus marketing on UBI

With actual driving data strongly influencing the predictability of whether a consumer will have an insurance loss or not, telematics is now an important factor in the determination of insurance premium pricing. When compared to traditional rating variables, telematics data provides insurers with context about how a person drives and presents insurers with the opportunity to rate risk more accurately.

Many are just beginning to adopt such policies, and will become more proactive in marketing their UBI programs. Insurance marketing will expand to drive awareness among consumers that they have new, personalized choices in the way their policies are priced. No longer do consumers have to pay premiums solely based on such variables as the averages of "like" individuals, certain elements of a person's credit history or other esoteric factors.

Related: Why companies can't get marketing right

6. Data privacy becomes less of a concern

For every piece of popular technology today — from drones to smartphones, Snapchat to Instagram — privacy is a consideration. Although the use of telematics data is no exception, we're seeing consumers decide that the benefits outweigh any hazard.

Drivers will continue to realize and become comfortable with sharing a little information to save money and gain valuable services, so it will be less of a deterrent to UBI and telematics adoption.

Related: Insurance consumers: We'll give up our data for personalized service

(Photo: Shutterstock)

7. Millennials will be the main adopters of UBI policies

In August 2015, Willis Towers Watson reported that millennials show particularly strong interest in UBI policies — with 88 percent "interested" or "maybe interested," compared to 74 percent for other survey participants. Millennials are very cost conscious and socially aware, and they desire to do things that support those values.

UBI is important to anyone who cares about being a better driver, creating safer roads, and receiving the best value from their automobile insurance provider.

Related: Ride-sharing millennials found to crave car ownership after all

(Photo: Shutterstock)

8. The policyholder relationship goes from reactive to proactive

As the automotive market evolves, so too, must the insurance industry. Telematics allows insurers to innovate their approach to claims, customer service and interaction — successfully moving from a low-touch "only when you need us" model to a high touch, "proactive and always there for you" business model.  This results in increased revenue, less risk and long-lasting customer relationships.

Related: Your car's been studying you closely and everyone wants the data

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