The great savior for mid-tier and smaller insurance carriers in the past decade has been the Web. Regional insurers could suddenly do business in the same manner as national carriers and customers found it nearly impossible to distinguish between the two. Life was great for these smaller insurance companies.

Alas, life rarelystands still, particularly when it comes to finding better ways to do things—quicker and less expensive—than your competitors. Midtier and smaller insurers are once again reminded of their status as their larger competitors are finding even more ways to operate effectively through the use of predictive modeling.

Telematics, one form of modeling, has become a game-changer for insurance carriers operating in the personal auto line. Soon, it will become impossible for those without this technology to compete for the good drivers of the world with larger carriers. Good drivers have long been saddled with less efficient underwriting tools that lump their rates together with less careful drivers, pushing the rates of better customers higher despite fewer driving mishaps.