How do companies ensure that the drivers of their fleet of expensive vehicles don’t take their eyes off the road and their phones?
An Israeli insurance technology company believes it has the answer with a new AI platform that monitors fleet drivers’ performance and smartphone activity behind the wheel and uses them to determine insurance rates.
Tel Aviv-based Fairmatic was founded in 2017 by its CEO Jonathan Matus, a former Google employee who worked on developing the tech giant’s Android phone operating system.
Creating a way to reduce driver smartphone use is “fixing a problem I helped create,” Matus tells NoCamels.
The Fairmatic app is installed on fleet drivers’ phones, where it uses AI to monitor both phone activity and driving performance in real time. It is these two data points that are central to determining the cost of fleet insurance.
“Every car on the road has at least one smartphone,” he says. “And these smartphones are actually little supercomputers that let you run machine learning algorithms.”
The platform compiles the data it collects for each fleet to create a risk model that predicts the likelihood that drivers will be involved in a traffic accident over a one-year period. The data is also used to provide fleet managers with insight into the performance of their drivers.
“When someone hits the brakes, when someone is distracted by their phone while driving, when someone goes over the speed limit — these different things can be understood and quantified,” says Matus.
As an insurance company responsible for paying out claims, it explains that it is vital to understand these statistics – and with its AI platform, it can do just that.
This approach makes Fairmatic unique in the insurance industry and means there is very little competition, he says.
Matus says the company started with just a simple idea and 25 people, all motivated to innovate a solution to distracted driving, which he calls the negative impact of ubiquitous smartphone use.
In fact, the US Centers for Disease Control (CDC) says that in the United States alone, nine people die each day in crashes that are reported to involve a distracted driver. That equates to an average of 3,000 nationally killed annually from distracted driving incidents alone, even without taking into account those injured in such incidents.
Matus says that after more than a decade of looking at road safety through the lens of technology, he has come to realize that surveillance is necessary if you want to change the behavior of people behind the wheel.
“Insurance is a monetary bond that everyone is required by law to respect when they drive,” he says. “So if you can use that as the right incentive in front of drivers and fleets, you can ultimately change behaviour.”
The company offers competitive pricing and incentives to fleets committed to safety improvements and behavioral changes.
Fleet owners buy insurance for multiple drivers who are all covered under the same policy, Matus says. But individual problem drivers mean the fleet owner will have to pay more, something he says backfires on them and ultimately discourages such behaviour.
“Linking monitoring with insurance is the most effective option we’ve found so far,” he says.
Although the company has what Matus calls “thriving” offices in Israel and India, as well as representatives in the UK and Poland, most of Fairmatic’s customers are located in the US. And according to Matus, this will most likely remain the business model for the future, with a focus on American expansion.
“It’s a $70 billion opportunity,” he says.
The company came out of stealth in 2022 and had already raised $88 million by the fourth quarter of 2023 — an amount that Matus believes is sufficient for now.
“We don’t need to collect more,” he says. “We already have enough to break even and it’s going right on track.”
However, he added as a caveat, should an attractive opportunity arise, further fundraising would not be ruled out.
Ultimately, says Matus, Fairmatic is committed to innovation and safety – and that’s what drives the company into the future.
“The purpose of our technology is to make the roads safer [and] we’re doing it one fleet at a time.
