In the early 1990's, credit-based insurance scoring caused a revolution in the insurance industry, as insurance companies used certain elements of a person's credit history along with many other factors, to predict how likely that consumer was to have an insurance loss. Research showed that there was a high correlation.

Companies that adopted this capability in their rating plans were able to gain competitive advantage, while those that did not, suffered through adverse selection and either went through consolidation or went out of business. Today, 95% of auto insurers use in it in states where it's a legally allowed underwriting or risk classification factor.

Growth forecast

The insurance telematics market is forecast to grow at a 50% compound annual growth rate (CAGR) by 2020, and the usage-based insurance (UBI) market is now estimated at 12 million drivers globally, according to Ptolemus Consulting Group (PCG). Simultaneously, consumers are falling in love with connected cars — adoption is growing at a rate 10 times as fast as the overall car market, and estimates forecast that 75% of cars shipped globally will be built with connected capabilities by 2020.