Auto Insurance Is Stuck In The Past. Here's How AI Can Fix It

Aug 31 2023 • 25 mins

How can data and AI make auto insurance fairer and roads safer? We talk with Yonatan Matus of insurtech startup Fairmatic about using mobile sensors to measure driving risk and incentivize fleets to drive more carefully.

Yonatan explains how traditional auto insurance companies use proxies like demographics and credit scores to determine premiums. This can lead to unfair overcharging of safe drivers. It also fails to incentivize risky drivers to improve.

Fairmatic aims to change this by using mobile sensors and AI to directly measure driving behavior. Their tech analyzes factors like speeding, hard braking, and phone use to score commercial fleet drivers on safety.

Fleets that work with Fairmatic get insights into their riskiest drivers. They're incentivized via usage-based insurance premiums to coach these drivers and improve safety. In turn, Fairmatic's insured fleets have reduced their crash rate by 25% on average.

We discuss:

- How commercial auto insurance losses have totaled $22 billion over the past decade

- The role commercial fleets play in road safety, driving over 50% of all miles

- Examples of safe vs risky driving behaviors that Fairmatic tracks

- The privacy implications and driver acceptance of fleet telematics

- How Fairmatic's data-driven model positions them for autonomous vehicles

- Why usage-based insurance can accelerate AV adoption by assuring regulators

Yonatan argues that fairer, data-driven insurance models are inevitable. He envisions Fairmatic will become the largest US commercial auto insurer within 10 years. Their usage-based pricing could make roads safer for everyone by incentivizing millions of fleet drivers to improve.