Rapid digitization has fueled innovation in the European financial services sector, especially in the insurance industry. Insurance companies are leveraging driver telematics data to offer personalized rates based on individual driving behaviors. Telematics provides real-time information on mileage, speed, braking habits, and the time of day you drive, allowing safe drivers to enjoy reduced premiums. While personalized pay-as-you-go insurance is relatively new in the UK, it is widely adopted in the Nordics. However, the use of IoT devices for telematics also introduces the risk of cyber threats.
Telematics devices are susceptible to cyber threats due to open-source software and third-party supply chain components. These vulnerabilities prompted the creation of the Digital Operational Resilience Act (Regulation (EU) 2022/2554), recognizing that insufficient resilience to information and communications technology (ICT) incidents can jeopardize the entire financial system. Under DoRA, financial institutions, including insurance companies, must adhere to rules for the protection, detection, containment, recovery, and remediation of ICT-related incidents. DoRA explicitly outlines requirements for ICT risk management, incident reporting, operational resilience testing, and third-party risk monitoring.
Our customer provides real-time driver scoring data and metrics to the insurance industry through a cutting-edge data processing platform. Their solution combines car and driver telematics with contextual factors and cloud-based machine learning to generate real-time insights into driver behavior. This includes metrics such as acceleration, maximum speed, and other driving habits. This enhances insurers’ ability to assess risk, making them more cost-effective and better at optimizing compensation payouts. As a result of real-time driver telematics, insurance companies can now offer personalized pay-as-you-go products, allowing premiums to be based on real-time driver behavior.
Driver telematics companies must comply with DoRA to offer their services to insurance providers. They initially tried a DIY approach but decided to implement a more robust solution as their footprint in insurance rapidly increased. Uptime is paramount for real-time car and driver telemetry. Aeris IoT Watchtower continuously monitors device traffic to respond faster and prevent any downtime. The customer can prove regulatory compliance with regular auditable risk assessment reports and improve their insurers’ compliance posture with faster self-service incident responses. Lastly, Aeris IoT Watchtower enabled them to further monetize their services by offering proof of compliance, continuous device monitoring, and deep device diagnostics as additional value-added services.
Our customer adopted Aeris IoT Watchtower because they are negotiating a new contract with their insurance customer that would include the cost of Watchtower Awareness. As a SaaS subscription, Aeris IoT Watchtower allows for frictionless adoption. Additionally, they felt comfortable with Aeris because they could try Watchtower for a year to assess its effectiveness in helping them comply with regulations and then decide whether to renew it based on their experience.