Insurtech Telematics Technology and the Story of UBI

By Alex Clere
We track the timeline of usage based insurance (UBI) for the auto industry, telematics technology, and look how its developed and will transform the space

UBI and telematics-based insurance is transforming the mobility and auto insurance sector. But, it’s also being used in other areas of the insurance industry too. We take a look at who invented it, how it became mainstream, and what the present demand means for future use cases. 


Technologies that birthed telematics

In the 1960s, the US Department of Defence developed Global Position System (GPS) technology. At the same time, Theodore G. Paraskevakos’s work on Caller ID led to the conception of M2M (Machine to Machine) communication.


Early computer science

Scientists Simon Nora and Alain Minc were the first in the world to classify the technology and devised the term “Telematics” in a report to the French government.

Early 80’s

The EU takes note  

The EU commissioned research into vehicle telematics with the aim to improve road safety.

This was probably the beginning of wider telematics adoption in vehicles and its uses today.

Early 90’s

The first insurer recognises telematics potential

Progressive Insurance was the earliest pioneer in the UBI movement. They recognised the value of telematics technology and patented a usage-based product in the mid-1990s.

Early 2000’s

First UBI insurance is launched

Progressive Insurance Company and General Motors Assurance Company (GMAC) began to offer mileage-linked discounts through combined GPS technology and cellular systems that tracked miles driven. These discounts were (and still are) often combined with additional benefits like roadside assistance and vehicle theft recovery.

The future

Automation, AI and Big Data

We predict that the majority of auto insurance policies will be usage-based in the not too distant future. This movement is being driven by increasingly automated systems and the introduction of driverless vehicles.


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