Investors may have noted the increasingly number of car insurance applications that rate your driving and offer you a policy renewal quote priced on how well you score. GPS-based telematics is the technology under the hood that makes this possible, often called ‘black boxes’.
The Aviva Drive app is a good example (mum and dad challenge sons and daughters to an effective ‘drive-off’), but there are loads of policies using telematics.
On the stock market there are two specialist telematics technology companies, Quartix (QTX:AIM) and Trakm8 (TRAK). Both serve the fleet market, offering services to organisations with large numbers of vehicles, things like logistics operators or delivery businesses.
Different strokes
There are subtle differences between the pair’s operating models, but what stands out is their take on car insurance. Trakm8 embraces this market sub-sector, Quartix has by-and-large ditched it (barring odd contracts on which decent returns can be made).
Trakm8 makes its own black boxes in its factory in the west Midlands and ships them to policy holders to be self-installed. Last year (to 31 March 2017) was pretty decent for the company on this side, with units deployed up 35% to 124,000. That compares to 13% growth on fleet to 66,000 devices reporting to Trakm8 servers.
Quartix thinks the car insurance market has become too cut-throat, capping its ability to get decent returns on most business. Rather than take the hit on profit margins the company prefers to concentrate on the fleet market.
Recent trading
Trading for the six months to 30 June showed new UK installations up 44% to 10,450, increasing the subscription base to 78,000 vehicles. There was also solid progress in France ( up 30% to 1760 vehicles) while it continues to seed its small but fast growing US arm.
Both companies have had their challenges over the past year or so. Trakm8 issued a profit warning in November 2016, while Quartix' short-term growth got knocked as it closed the door to most car insurance work.
It will be interesting to follow the progress of both given their diverged opinion of car insurance telematics.
