Auto insurers are using the Internet of Things to monitor drivers and cut costs

Auto insurers like Progressive, Allstate, and State Farm are using the Internet of Things (IoT) to monitor drivers’ habits, including changes in speed, how often they drive, and the time of day they drive. For insurance firms, the expectation is that this will lead to lower costs through a better ability to assess clients’ risk levels. For consumers, this means better premium rates — assuming they drive well.

The most prevalent way of monitoring driving habits is by using On Board Diagnostic (OBD-II) dongles, or plugs, that send analytics about the driver’s driving habits back to the insurance company. The dongles are plugged into the car’s port under the steering wheel. We estimate that there are 155 million cars currently on the road in North America that are compatible with OBD-II dongles, and this number will grow as cars from prior to 1996 are pulled off the road and replaced by new models.

In a new report from BI Intelligence, we examine the impact of the IoT on the insurance industry. We analyse current US insurance markets — including the auto, health, life, and property insurance markets — and look at ways insurers are integrating IoT devices.

Access The Research And Our Ongoing IoT Reports And Charts By Signing Up For A Risk-Free Trial >>

Here are some key points from the report:

In full, the report:

To access the full report from BI Intelligence, sign up for a 14-day trial here. Members also gain access to new in-depth reports, hundreds of charts and data sets, as well as daily newsletters on the digital industry.

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at