POST ONLINE: Analysis: Telematics – telling it as it is?
11th October 2019
This article has been reproduced
Fabricating a motor insurance claim used to be as simple as arranging for a mate to drive into your car but with today’s new technology, Veronica Cowen explains how much harder insurers are making it for the fraudsters.
Dodgy motor insurance claims are not new, but whereas the owner of an old banger might previously have dumped it in a lay-by, set fire to it, and claimed for a replacement, today’s crooks might set up a crash with the driver of another vehicle, or using an unsuspecting driver, then fabricate an insurance claim.
If one or both cars have reliable black boxes, the investigate process will be enhanced, raising the chances of defeating the claim, because the data is a record of the driver’s actions seconds before a crash, and important evidence in the absence of independent witnesses.
Judges are increasingly warming to the idea of admitting such evidence, which is particularly helpful in staged accidents, reports Simon Rewell, head of financial crime at Insure The Box: “We use the traditional techniques, and then introduce the telematics data. It can be a case carrier where the judge accepts the clarity and independence of the data.”
This is echoed by Steve Beard, product head at Markerstudy Insurance Services, who comments that quality telematics data provides another piece of evidence to the accident investigators’ puzzle, which is increasingly accepted in courts as additional evidence, sometimes referred to as a ‘digital witness’.
Critics claim that many motor insurers are primarily using telematics as underwriting tools, while steering away from such devices as anti-fraud and claims aids. They are suffering from “telematics fatigue”, according to Richard Jelbert, co-founder and CEO in Inzura, who adds that the insurance industry’s long history of using telematics has led to a legacy mind-set: “The cost of the black box, plus the added inconvenience and cost of the installation has meant an entire generation of insurers, brokers and underwriters see telematics as a way to aggressively manage young drivers and punish them with cancelled insurance if they appear to be risky. It has been mostly used as a blunt underwriting tool.”
According to Graham Gordon, director of marketing, global telematics at Lexis Nexis Risk Solutions, the quality of data has improved, but a proliferation of devices with little standardisation is hindering its best use in the claims process. He explains: “Different devices report very different accelerometer data values, depending on how much filtering [there is] of the raw signal and the range of the accelerometer data they are using.”
Currently the greatest take-up is by young drivers, who might otherwise not be able to afford to drive, and the carrot to drive carefully is cheaper premiums. In the absence of compulsion, it is difficult to see why drivers who overtake on bends, tailgate on motorways or text at the wheel would want a telematics box catching them ‘bang to rights’ but older drivers, whose skills are getting a bit rusty, might be persuaded to sign up, given the safety benefits of the devices.
“There is so much more to the potential of telematics where it can be used to engage with all consumer types, encourage safer more economical driving and – via an app – deliver a convenient and efficient overall insurance experience – one with which a consumer will want to engage,” Jelbert comments.
On top of improving driver behaviour, on-board telemetry equips insurers to respond faster to claims, by using accident data provided by telematics-equipped vehicles. As well as enhancing customer satisfaction, and retention, it can also reduce investigation costs.
According to Mark Stamper, CEO of Camera Telematics, having accurate data from a vehicle, or the scene of an incident speeds up the investigative process by offering a reference pint, helping compile a picture of events leading up to it, including parameters like speed, direction, deceleration, G-forces and location.
He adds: “Telemetry boxes can use this to offer a virtual reconstruction of an event via a user interface. Although these use algorithms to create the event images, they can lend an insight to an investigation and overall picture of events that occurred.”
As well as helping determine liability more quickly, the devices, by giving the scale of impact, can help disprove a spurious whiplash claim, explains Anthony Aronin, head of smart wheels at More Than, who adds that the evidential nature of telematics data is supplementary rather than decisive in itself.
But is can also be inferential, in the sense that data showing a pattern of behaviour between the claimant driver and the third party, such as data which reveals a regular presence at the latter’s address on a number of occasions prior to the event, could be relied on as evidence of collusion in a staged accident.
An important time-saver for post-accident investigators is the fact that data can be displayed without the need for them to visit the scene of the incident. It also enables understanding of the direction of travel, the G-forces on alleged impact, and calculate respective speeds of involved vehicles and abrupt braking, which can be associated with contrived claims at roundabouts, explains Gary Woodhall, Motor Division Director at QuestGates, who notes that previously a narrow country road collision in treacherous conditions might have resulted in an equal liability apportionment, where both drivers pleaded innocence, but analysis of black box data can prove recklessness on the part of one or other motorist.
Following an accident, first notification of loss is crucial in ascertaining liability, potentially saving insurers hundreds of pounds per claim if they are managing it: “Some black boxes and telematics apps send an automatic [notification] to the insurer if an accident is detected, enabling it to select appropriate hire car and repair services, often ones with which they have a commercial deal with agreed discounts,” explains Jelbert.
The data can also help insurers quickly establish if their insured is at fault, as well as challenging or supporting statements concerning the accident, observes Jelbert, who adds that the benefit to customers includes immediate assistance, and the ability to record, and photograph, the accident scene: “If the data supports their claim not to be at fault, [it] should be settled more quickly and the driver’s no claims bonus maintained.”
The quality of data has improved over the years, and that facilitates all aspects of vehicle health to be displayed, Woodhall notes, adding: “As technology improves, richer data sources become available. For example, the amount of data available from the connected car far exceeds that of a ten-year-old black box. As well as understanding speed, harsh acceleration, braking and cornering, we can determine whether airbags were deployed, seat belts were fastened and verify tyre pressures at the time of the crash.”
However, the roll out of 5G technology isn’t expected to increase the penetration of telematics. “5G (or any generation) is not particularly relevant to GPS telematics, comments Dr Colin Smithers, founder and CEO of Redtail Telematics: “Smartphone-based data is very cheap but of far lower quality than black box data, if only because the phone is rarely properly mounted and user intervention means data is rarely complete. 5G phones won’t alter this situation at all.”
Smart phone shift
But while the information insurers can access from a smart phone might not be as reliable as from a fitted device, there has still been a shift to the smart phone, comments James Tucker, smart technologies manager at Allianz: “The granularity of data has moved backwards as smart phones aren’t as useful for providing crash data. However, in isolation smart phones have become more sophisticated for telematics data gathering, such as identifying whether the user is walking, travelling by car or riding a bike. In some cases the data is robust enough to be used in legal proceedings [and] can prove if mistaken identity has taken place, such as if a claim is made against a driver whose vehicle was nowhere near the claimed location.”
It can also be cheaper to use phones, as the driver is likely to have one already so doesn’t have to pay for a box, Aronin observes.
Trust in the data is a big issue and many complaints to the Financial Ombudsman Service about black box telematics relate to what the data shows. So what kinds of errors can skew interpretation? GPS spots have limited accuracy and can suggest the vehicle was not where it was claimed to be on the road. The data has to be interpreted by an expert, Smithers explains, adding: “Because the GPS signals are microwave radio signals transmitted from orbiting satellites, tall buildings appear as mirror to [them] and can fool the GPS device into thinking it is not where it really is.”
One complaint to the Financial Ombudsman Service, reported in August 2019, featured a dashcam which got the driver out of a scrape, after he felt driven to fit one to challenge black box evidence of alleged speeding, and other unsafe driving. Upholding the complaint of black box inaccuracy, the ombudsman observed that the driver should not have had to expend so much time and effort disproving the data, and was entitled to expect it to be accurate.
As to how useful dashcams are generally, Beard explains they can deliver highly valuable accident information, adding: “They can also complement telematics driving behaviour data analysis by providing additional insight on driving style, using modern digital image processing algorithms. This could include external views around the vehicle, as well as detecting fatigue, illness and driver distraction.”
Jelbert adds that dashcams add video and sound to the information that is available to the insurer. Many also store GPS location per second and can provide a second source of GPS data and accelerometer. In addition, as Smithers observes, they can show who did what to whom outside the vehicle and – if also inward facing – who was driving, whether seatbelts were worn or if distraction or disturbance was occurring within the vehicle at the time of the incident.
As to whether accident investigators need to supplement the search for potential causes and explanations for a crash beyond this technology, Woodhall points out that the many factors which could contribute to causation include driver state, external stimuli, latent defects, automatism, and deliberate acts. These might some to the fore through additional investigation. “[They] need to use the information that is presently available but including accelerometer and gyro data. Using GPS data alone has limited value and can lead to erroneous conclusions. Combining with dashcam data can only improve things further,” Smithers comments.
Data protection and security issues can result from the exponential growth of the storage of data. Stamper says the General Data Protection Regulations are a real challenge in using video evidence. He adds: “We have tight controls in place to ensure secure storage and access by authorised people [but] properly managed data protection will not slow the growth of telemetry use, but help define the process in which it is managed safely.”
Mapping out future issues, Gordon says the current focus in on helping car manufacturers and insurers gain consumer consent for sharing their data for usage-based insurance and all the post-collision services that both want to offer their shared customers. But the overriding issue remains that of consumer trust, and education is key to answering drivers’ questions about whether the information will be used to decline claims if they are at fault, or have exceeded the speed limit. He adds: “It is vital that, as usage-based insurances develop, driven by improvements in technology and data, the industry really sells the value and benefits to the consumer… and challenges the misconceptions.
Looking ahead, could telematic devices become compulsory in the future? “With the move to driverless technology, telematics is becoming a necessity, rather than a nice-to-have technology. Video combined with black box data will become standard across the original equipment manufacturers, once a standard has been defined,” in Stamper’s view.