Smartphone instrumentation for insurance telematics

Insurance telematics is a disruptive technology that is expected to reform the vehicle insurance industry. Based on sensor data, the traditional measures for calculating the insurance premium are complemented to determine a fee that more accurately predicts the risk profile of the policyholder. From an instrumentation and measurement point of view, there are several insurance telematics challenges that have to be tackled. It is about consistently extracting relevant figures of merit (FoMs) like number of harsh braking, speeding, heavy cornering, trip smoothness, etc, and then to transform these FoMs into a valid measure, or score, that determines the risk profile of the insurance customer. The paper presents a characterization of FoMs in terms of actuarial relevance, the driver´s influence, stationarity and observability, which are important for the given task. Dedicated hardware to be fitted into the on-board diagnostics outlet as well as contemporary smartphones are two different insurance telematics platforms for data collection. The paper discusses the properties of the smartphone in the perspective of insurance telematics as a low-cost alternative to the hardwired platforms like the one connected to the vehicle´s on-board diagnostics outlet.