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A Cost-Effective Alternative to Telematics? Your Customers are Already Opted-In.

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Telematics vs DRN Vehicle Sightings

Vehicle Sighting Data vs Telematics Explained

Never heard of vehicle sightings? Or maybe you have but want to understand how it differs from telematics. Before we get into the specifics, let’s address why you should care. Telematics continue to rank among one of the top trends in the industry. Yet the fact remains that, telematics requires policyholders to “opt-in” in when the technology is used for commercial underwriting. What you may not know is that your policyholders are already automatically opted in to vehicle sighting data for an immediate return on investment. That’s because vehicle sighting data captures license plate sightings, and all vehicles nationwide must have license plates. The sightings are held securely and are subject to the Driver’s Privacy and Protection Act (DPPA) permissible use provision under which carriers can compliantly use the data.

In our conversations with commercial auto insurers, we learned of several misconceptions about how vehicle sighting data differs from telematics solutions other than the fact that telematics is effectively an opt-in technology. The three main areas we see significant differences between both solutions are in:

  • Cost
  • Return on Investment
  • Data Management

With the explosion of data now available to insurers for product development, underwriting and policy administration, it can be difficult to determine what type of data is valuable to your organization that will help meet your business objectives. Not only is the type of data an important consideration, how the data will be consumed, internalized and ultimately cost justified are of equal importance.

1: Cost – Plan to Pay More for Telematics

To have the ability to collect all the data telematics provides, you will incur significant expenses to install and maintain the devices in all of your fleet vehicles in addition to the cost of the device itself. Remember these are hardware devices. And like all devices, they are subject to failure, installation, and activation issues. Moreover, chances are if someone is looking to commit fraud, they will likely find a way to cheat the device or even disable it.

Many insurers absorb the cost of professional telematics device installation and maintenance, while others take on those tasks themselves. Unless your fleet consists of the exact same vehicles, there can be different issues for different vehicle makes and models.

Vehicle sighting data requires no hardware devices, eliminating all the costs mentioned above. The data is collected 24/7, nationwide and includes vehicle images, data and time of the sighting, as well as the location of the sighting. DRN, the leader in the industry, maintains billions of nationwide sightings and adds over 120 million monthly. In fact, the cost of vehicle sighting data is directly proportional to the amount of data you wish to consume on a monthly, quarterly or annual basis. Volume pricing comes into play – the more data you consume, the less you pay per record. Vehicle sighting data is widely used by claims and SIU organizations, and someone at your company may be using it today. This is all made possible by subscription-based pricing that can be easily monitored and budgeted for on an annual basis.

2 – Return on Investment: Get More for Your Money

Determining the return on investment of a telematics solution is not a simple undertaking. To justify the cost of implementing, supporting and maintaining an ongoing telematics program, you have to show an increase in:

  • Customer satisfaction
  • Route Optimization
  • Improving driver behaviors
  • Safety Records

Telematics programs also need to exhibit a reduction in:

  • Headcount – by optimizing drivers’ routes, companies require less drivers
  • Vehicle fuel, repair, and maintenance costs
  • Insurance costs for auto physical damage, workers’ compensation, and auto liability claims

Although valuable, many of these areas are subjective, making them difficult to measure on an on-going basis.

The return on investment for vehicle sightings data solutions is straightforward. Commercial auto insurers can use vehicle sightings immediately, with no IT integration to:

  • Reduce premium leakage: Verify Territory, Radius Class and Final Build on your policies at point-of-sale and renewal.
  • Improve your combined ratio: Attract good risks who are profitable and eliminate bad ones.
  • Offer competitive pricing: Improve pricing accuracy.

These areas are not subjective and are already being measured and closely monitored.

3 – Data Management: Minimal Required for Vehicle Sighting Data

By design, telematics devices collect an enormous amount of data. Not only are they collecting data on a real-time basis of the exact position of all of your vehicles, they are also collecting speed, acceleration, and other data associated with driver behavior. Now, multiply that by the number of vehicles in your fleet, by the number of hours per week these vehicles are active. This can add up to a large amount of data that has to be captured, stored, analyzed and ultimately used in different applications in your organization.

Vehicle sighting data is of the greatest value when you have millions or even billions of sightings. The vendor collects and stores the data collected 24/7, 365 days a year. They maintain responsibility for compliantly capturing the data, storing the data and processing it so it can be consumed in a useful format.

A key difference is, you don’t have to use all of the sightings, just the ones necessary to determine radius class and final build-out for example. And, there is far less data in each record that needs to be analyzed:

  • Vehicle location – longitude and latitude
  • Date and time stamp
  • License plate image
  • Vehicle image

This is far less data to consume and easier to include in your existing business processes.

If you want to determine if your policyholder’s fleet of 20 plumbing vehicles is staying within its Territory, Radius Class, or what the Final Build of new vehicles added to the fleet are, you only search for the sightings of those vehicles in a given time period – typically at point-of-sale or at policy renewal.

Radius Class can be difficult to predict or even verify. Vehicle sighting data can be used to prefill the Radius Class at point-of-sale, and to re-price policies where the Radius Class was wrongly identified.

Confirming Final Build can be done in the office rather than by the agent or broker by simply viewing the vehicle images to confirm final build.


There certainly are many examples of where a telematics program makes sense. But, if you are focused on reducing premium leakage, getting unwanted risks off the books, improving your combined ratio and offering more competitive pricing, vehicle sightings data provides a more cost effective solution with:

  • Lower cost: No hardware purchase, and no hardware to install and maintain
  • Straight forward ROI: Reduce premium leakage, improve your combined ratio and offer more competitive pricing. These are not subjective benefits.
  • Minimal Data Management: The vendor handles the data capture and management and feeds it into your existing business processes.
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