The growing pressure on auto insurers to support improved driversafety and to bring claims inflation and prices under control willmake technology increasingly central to competitiveness, accordingto global professional services company Towers Watson.

"Already, the recent expansion in companies offering usage-basedinsurance (UBI) policies, based on in-car telematics devices, isputting those companies without a UBI proposition at risk ofeventually being left with the 'bad' risks, particularly amongyounger drivers," says Tony Lovick, director of analytics forTowers Watson's DriveAbility UBI program.

But this is just the beginning, according to Lovick. He citedthe comments of Association of British Insurers director-general,Otto Thoresen, at its recent Annual Motor Conference in which heoutlined five priorities for the industry in 2012, includingreducing young driver deaths, whiplash claims, fraud and uninsureddriving.

"Existing technologies can certainly help towards these goals,"says Lovick.

As well as monitoring and providing feedback on driverbehaviors, telematics devices can be used to record whiplashincidents. Other services such as automated emergency and breakdowncalls are applications of the technology that would help customersand support safety objectives.

The way forward is likely to be made smoother by the increasingsophistication of onboard vehicle technologies. A number of automanufacturers, including most recently BMW, have unveiled plans forthe 'connected car' and several companies are involved in the CarConnectivity Consortium.

Mobile technologies are also increasingly likely to come intothe competitive mix, according to Towers Watson.

"The launch of price comparison apps by Moneysupermarket.com andConfused.com are a sign of things to come but who says that, asvehicle wireless connectivity improves, they have to stop atpricing," says Lovick.