Insurance Services Office announced it has formed an alliance with IVOX Inc., a firm with expertise in predictive driver risk management, to analyze data collected by telematics devices installed in passenger vehicles and commercial fleets.
ISO, based in Jersey City, N.J., said the alliance will be the foundation for next-generation tools and joint product development for measuring, managing and reducing risk. As part of the alliance, ISO said it has invested in Atlanta-based IVOX as a shareholder. The size of the stake was not disclosed.
The Applied Informatix unit of ISO will work with IVOX and insurance companies to collect and analyze data from telematics devices installed in vehicles–initiating the largest study of its kind to date to assess the predictability of telematics data for rating, underwriting and claims purposes, ISO said.
Steven Craig, general manager and assistant vice president of ISO's Auto-Property Loss Underwriting Service, said in a statement that his company and IVOX can assist insurers in developing outreach strategies that outline the benefits and value of such programs "for drivers and transportation operators of all varieties."
The telematics devices will wirelessly transmit data reflecting certain driving behaviors. The data will be collected and analyzed to help customers better understand and manage risk, it was explained.
Insurers participating in the study will use IVOX's patent-pending DriverScore to help them understand the risk associated with their individual policyholders. In addition, they will be able to offer their policyholders driver safety, fuel saving and engine diagnostic tools, said ISO.
Mr. Craig said many insurers have expressed an interest in understanding and using this type of data, and ISO is looking forward to working with IVOX to establish the value of telematics data, supporting analytics and related services.
"This relationship will help us accelerate the development and delivery of advanced telematics solutions and pioneer new proficient rating, underwriting and claims-management tools the industry has come to expect," added Mr. Craig.
Gregg Warren, chairman and chief executive officer of IVOX Inc., said: "From our perspective, the relationship with ISO gives us the opportunity to accelerate national rollout of DriverScore and our patent-pending risk-analytics engine. Furthermore, we look forward to the opportunity to develop with ISO additional new and innovative products to help reduce risk and claims for our customers.
Responding to a question about how the program will deal with some of the touchy questions surrounding driver monitoring, Mr. Craig said in a statement that, "Different states will certainly require different approaches, and as time and technology progress these approaches could evolve and change.
"An example is the various uses of credit and loss data from state to state. As with all ISO programs, this one will fully conform to applicable state and federal laws or regulations, including those relating to privacy.
"In our program, no carrier would be accessing GPS data and "tracking" any driver. Additionally, the program will be "opt-in" for those drivers that wish to participate."
California Commissioner Steve Poizner, in proposing regulations to permit pay-drive insurance, said recently that he would not approve any carrier mileage monitoring utilizing GPS devices in order to obtain location data from consumers, calling it "vital that the privacy of drivers remains intact."
This article updated Oct. 8, 10:43 a.m.
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