A brief history of telematics. How it all began
Even though telematics car insurance is a relatively new trend, the telematics technology itself has been around in different levels of progression for the last 60 years. To trace back its beginnings, we need to look at the origins of GPS, Global Positioning System, used by telematics devices to track the coordinates of a vehicle while moving or at rest.
1960: TRANSIT comes into existence
The world’s first global satellite navigation system, called TRANSIT, was created at John Hopkins University APL in 1960. As the Cold War escalated, it primarily served military and intelligence applications. By 1968, it was transitioned to the Navy and expanded to include 36 satellites. However, TRANSIT did not provide enough accuracy of the Earth’s maps despite its constant development.
1978: The term ‘telematics’ emerges
Other predecessors to modern GPS included, among others, the Timation satellite-based navigation system, developed by the US Navy in the 1960s. Meanwhile, in 1978, Navstar 1 was launched, the first satellite in the GPS. It was developed by the US Air Force and built upon TRANSIT. The same year, the term ‘telematics’ was born, coined by the French in a technology development report. It translates the original word télématique, blending the French words for telecommunications and IT.
The 1980s-1990s: GPS is gaining importance
Following successful trials of Navstar, the satellite was authorized for civilian commercial airlines by Ronald Reagan in 1983. The first commercially available car navigation system was launched two years earlier by Honda (it was using a helium gas gyroscope to determine the position and distance). In 1990, Mazda introduced the first-ever car navigation based on GPS. As GPS technology continued to improve throughout the next two decades, in 2000, Bill Clinton recognized the importance of GPS access to civilians, and the technology reached the consumer market.
By that time, telematics was already developing. In 1988, Engineering Education and Centers (EEC) launched the first research programs experimenting with vehicle telematics leveraging GPS coordinates. The motivation behind the research was to improve road safety and promote more eco-efficient driving. Notably, the first telematics in insurance was used by Progressive Insurance in the mid-1990s.
The 2000s: Widening adoption of GPS and telematics
Throughout the nineties, GPS technology continued to improve in accuracy and reliability. 1999 marks the first use of GPS in a cellphone, and the next year, performance upgrades were made, improving the signal accuracy for civilians. The proliferation of GPS devices and solutions also dictated a massive decrease in pricing, making the technology available for all.
In parallel to the growing adoption of GPS among consumers, telematics technologies saw their first enterprise uses. Initially, they were embedded mostly in web-based fleet management systems. However, at that time, their performance was still too low for telematics to permeate the mainstream (they could transmit only one to two data instances per hour!)