How can companies ensure that the drivers of their expensive vehicles keep their eyes on the road and their phones?
An Israeli insurtech startup believes it can find the answer with a new AI platform that monitors driver performance and smartphone activity behind the wheel and uses them to set insurance prices.
Tel Aviv-based Fairmatic was founded in 2017 by the company's CEO Jonathan Matus. Jonathan Matus is a former Google employee who helped the tech giant develop its operating system for Android smartphones.
Creating a way to reduce driver smartphone use is “solving a problem that I created,” Matus tells NoCamels.
The Fairmatic app is installed on vehicle drivers' mobile phones and uses AI to monitor both phone activity and driving performance in real-time. These two data points are central to determining the insurance price for your vehicle.
“Every car on the road has at least one smartphone,” he says. “And these smartphones are actually little supercomputers that can run machine learning algorithms.”
The platform compiles data collected by each fleet to create a risk model that predicts the likelihood of a driver being involved in a traffic accident over a one-year period. This data is also used to provide fleet managers with insight into driver performance.
“When someone hits the brakes, when someone is distracted by a cell phone while driving, when someone exceeds the speed limit, we can understand and quantify these different things. ,” says Matus.
He explains that as an insurance company responsible for paying claims, understanding these statistics is essential, and the company's AI platform allows them to do just that.
This approach makes Fairmatic unique in the insurance industry and means there is little competition, he says.
Matus said the company started with just a simple idea and 25 employees, all motivated to innovate a solution to distracted driving, a negative impact of smartphone proliferation.
In fact, the U.S. Centers for Disease Control (CDC) says that nine people die every day in the United States alone in crashes that allegedly involve distracted drivers. This means that an average of 3,000 people die each year nationwide due to distracted driving alone, even without considering injuries caused by distracted driving.
Matus says that after more than a decade looking at road safety from a technology perspective, he has come to understand that if we want to change the behavior of people behind the wheel, we need to monitor it.
“Insurance represents a financial relationship that everyone is required by law to protect when driving,” he says. “So if you can use that as the right incentive in front of drivers and vehicles, you can ultimately change behavior.”
The company offers competitive pricing and incentives for fleets that are committed to improving safety and changing behavior.
Mattos said vehicle owners purchase insurance for multiple drivers and they are all covered by the same policy. But individually problematic drivers mean fleet owners have to pay more, which backfires on drivers and ultimately discourages such behavior. That's the case, he says.
“The combination of monitoring and insurance is the most efficient option we have found so far,” he says.
Although the company has “thriving” offices in Israel and India, and distributors in the United Kingdom and Poland, most of Fairmatic's customers are in the United States. And Matus says it's likely to remain a business model focused on expansion in the U.S. in the future.
“This is a $70 billion opportunity,” he says.
The company will come out of stealth in 2022 and has already raised $88 million through the fourth quarter of 2023, which Matus believes is enough for now.
“We don't need to raise any more money,” he says. “We already have enough capital to move towards profitability and things are going according to plan.”
Still, he added, further funding would not be out of the question if an attractive opportunity presented itself.
Ultimately, Matus says Fairmatic is committed to innovation and safety, which is what will drive the company into the future.
“The purpose of our technology is to make roads safer.” [and] We're doing it one fleet at a time. ”
