Telematics System in Usage Based Motor Insurance

For the premium calculation and billing process in the motor insurance, current billing models are very general and not optimally tailored for the end users. Important parameters such as mileage, driving behavior and types of roads driven are not considered for the premium calculation. Development of advanced information and communication systems, significant drop in the technology cost of ownership, as well as the necessity for market differentiation in the insurance industry, facilitated the appearance of new billing models in the motor insurance industry. The purpose of this paper is to demonstrate underlying principles of the technology facilitating new billing models in the motor insurance industry. This paper gives an overview of the system architecture of one of the telematics systems offered and used on the market, as well as the data model used in the billing process. The potential of such a system is demonstrated through the real case project implemented in Eastern Europe.