In the past couple of years, insurtech commentary has shifted from threatening disruption to an emphasis on collaboration. One insurtech partnership that’s been ahead of the conversation is between Cambridge Mobile Telematics (CMT) and US insurance giant State Farm.

Since 2011, State Farm has been working with this small company, founded by MIT professors, using its technology to provide safer driving apps. After some initial testing, the apps were also introduced specifically for State Farm’s auto insurance policyholders, who receive discounts off their premiums as rewards for safe driving behavior.

These State Farm-branded driving apps evolved through a series of iterations over the years, but are generally implemented when a policyholder downloads an application to their smartphone and pairs it to a Bluetooth beacon device fixed within their vehicle. CMT’s DriveWell platform is then able to track driving behavior and analyze a series of collected data sets.

State Farm policyholders are scored for driving at ‘excessive speeds, hard braking, harsh accelerating, and hard cornering,’ according to a press release. The app also reminds customers not to use phones while driving and encourages safer driving practices. Customers who sign up to use this app become eligible for discounts of up to 30 percent off their premiums.

CMT VP of Product Katherine Wellman told the Commercial Carrier Journal, “The accuracy of driver behavior risk models developed by CMT are 22 times more accurate than traditional actuarial models used by insurers to assess risk with stale metrics such as residence, gender, and credit scores.”

For young drivers, auto insurance often comes with steep premiums, making the prospect of discounts even more appealing for teens - and their parents. Even adding a teenage driver to a parent’s existing policy can increase premiums by as much as 80 percent with some carriers.

It’s not without reason. According to one Carsurance agent, teenage drivers are nine times more likely to cause an accident than a 45-year-old driver. So State Farm offers an alternative program called SteerClear for the 16 to 25-year-old age group, which features in-app messaging and monitoring specifically designed for the younger driver as well as monitors so parents can view their child’s progress.

In a recent interview with CB Insights, CMT CTO and Co-Founder Hari Balakrishnan said that, while most end users expect to be receiving financial rewards that are ‘excessive,’ the reality is not all of them are positioned at the top end of driver ratings to receive the highest available discounts. However, Balakrishnan also says that end users are very interested with the safety features, want as much information as possible on why they receive a certain driver score for a trip, and want to know how they can improve their behavior next time.

Customer reception to the program has warmed over the years, as the in-app feedback provided to drivers improved and initial concerns were addressed, including providing clearer communication about discounts.

CMT claims their DriveWell technology can reduce phone distraction by an average of 35 percent within 30 days, and is working towards offering automated crash and claims management, as well as video analytics. Insurance Journal reports that CMT’s technology uses a combination of mobile sensing, artificial intelligence and behavioral science.

“Users can now see exactly what driving patterns have affected their performance. For example, I can now learn that I always make a hard brake at a particular stop sign, and I can work to correct that with better anticipation. Previously, I was only able to get general information about the entire driving experience,” said Scott Bruns, State Farm Director of Telematics Services.

The next steps for the State Farm and CMT partnership include further exploration of the large volume of data they continue to gather from drivers. Information gathered can help insurers with fraud prevention, by being able to detect whether a crash happened as it was claimed, as well as automate some of the claims processes entirely.

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