Telematics-based Smart Insurance for the Aerospace Industry
In a world where smart technologies are used in all areas and fields around the globe, insurance companies are adopting smart insurance practices by using telematics. Real-time telematics and artificial intelligence are incorporated in aerospace vehicles to keep track of their activities. The telematics devices record data such as average speed or flight habits and calculate insurance premiums accordingly.
Telematics allows for obtaining real-time data and thus plays a vital role in how insurance charges are calculated for coverage in these vehicles. This can be done via mobile applications, bluetooth devices, or plug-in equipment.
Advantages of Telematics-based Smart Insurance
There are several benefits of resorting to smart insurance via telematics in the aerospace industry. These include:
- Telematics-based insurance results in improved flight practices. It gives information to the pilot about their common flying practices and patterns. Consequently, this leads to overall improvement based on the data that is provided over time.
- It increases transparency and reduces miscommunication between the two parties, i.e., the insurer and the insured.
- It helps the insurance companies to improve their customer service.
- It helps decrease claim charges for insurers and reduce insurance premiums.
- It allows for a safer flight following all rules. Hence, most telematics insurance companies give discounts by analyzing flying habits, and the premium is based on the telematics data that is collected.
- It aids insurance providers in determining damages that may be caused to the aircraft or any air-based vehicle.
- Telematics-based smart insurance can help decrease the number of fraudulent claims made to insurance companies.
- It automates the procedure for claims, largely reducing the overall cost of calculating the claims.
How is Telematics-based Smart Insurance Employed in the Aerospace Industry?
There are multiple start-ups and companies that are focusing on the utilization of telematics for smart insurance in the aerospace industry.
Voom is a telematics-based Insurtech start-up for mobility products that include small planes. It is a licensed insurance broker that contributes towards smart insurance and is operating in all 50 US states.
Skywatch.AI is another start-up that is working towards smart insurance based on telematics for aviation. It provides insurance to light aircrafts. It observed that pilots are charged more than needed for insurance purposes, and hence in order to reduce the insurance premiums, the company has been putting efforts into moving towards smart insurance. It believes in underwriting insurance policies through real-time data that can be collected from aircrafts in-flight. The analysis of speed and angle while the pilot takes off or lands can aid in determining the pilot’s flying behavior. Skywatch.AI has also discussed calculating an average score for the pilots. Moreover, telematics can give an insight into weather conditions which can be a cause of risk to the flight in case of thunderstorms or blizzards.
Insurance companies can obtain an advantage by partnering with telematics companies that keep track of aircrafts and other vehicles in the air. For instance, Edge Telematics is a start-up that tracks and monitors the status of aircrafts on continuous basis in real-time. This can, in turn, aid insurance companies in catering to claims by using the telematics company’s initiative.
VisionTrack is a video telematics solution provider for fleet management that has partnered with a number of insurance companies, brokers, and accident management companies. It provides support to the insurance sector by offering video telematics to track the aircraft activities and helps in increasing safety in the air and at ground level. Moreover, it can protect against any false or exaggerated insurance claims, because of which this project has also received insurance industry awards.
Starr Gate has developed an insurance app specially made for aerospace or aviation pilots. It consists of multiple features along with real-time tracking of the flight and the pilot’s flying habits. The application is an interesting step in smart insurance because it has underwritings from Starr Insurance Companies. The telematics allow the data obtained from the application to be used to keep insurance premiums low and provide good discounts. Moreover, it enables the user to buy coverage for a few months together. Flight performance can be tracked easily, and this leads to safer flights. Aggregate scores and feedbacks are generated as a result of real-time tracking, which helps pilots to be self-aware of their flying patterns.
Similarly, CloudAhoy is an initiative that provides and builds cloud de-briefing products for pilots. Insurance companies like the Starr Insurance Company have adopted this as a tool to get coverage through the data that it provides.
The use of telematics along with Artificial Intelligence (AI) is expected to become more deeply integrated into the aerospace industry. Insurance companies must understand the changing patterns of the usage of newer technologies employed and how these would contribute to re-shaping insurance policy procedures. It is most likely that customers would not want to revert to traditional insurance methods because of the benefits that smart insurance brings in. The aerospace industry is expected to move towards telematics for smart insurance because of its transparency and capability to offer more affordable premiums.
Smart insurance is expected to change the way pricing, claims, distribution, and underwriting are done. With the “Pay As You Move” technology, telematics is quickly emerging as a leader as the digital revolution continues to offer opportunities across industries.