Mikhail Anokhin
9 February 2016

Smart Cars: What Impedes Adoption of Technologies in Russia?

Mikhail Anokhin, Executive Director and Co-founder, “Smart Driving Labs”, explained why adoption of telematics in Russia is such a long process and how is it going to benefit ordinary drivers.

Mikhail Anokhin, Executive Director and Co-founder, “Smart Driving Labs”, explained why adoption of telematics in Russia is such a long process and how is it going to benefit ordinary drivers.

In the past several years ‘smart’ automotive technologies have been on the high rise. We witness so many different new services helping car owners to improve their driving styles, economize on car maintenance, and helping companies from various industries to better cooperate with their clients.

According to research conducted by Ptolemus, analytic company, usage-based insurance market expands rapidly in Europe and the U.S. - millions of clients are offered custom rates based on their driving style data collected with special telematics devices. In the meantime, automotive telematics in Russia has not yet been used extensively.

Today we are going to talk about the reasons of such state of things and prospects for ‘smart’ automotive technologies in our country.

How It Began

Despite that in recent years automotive telematics has been debated a lot, car monitoring technologies and data analysis technologies are not something new. Already at the turn of the XXI century companies owning motor pools began to apply them as they needed to monitor how their transport was used, its condition, fuel consumption, etc. By mid-decade some Russian companies also began using such tools.

After some time such technologies became more affordable which led to further development of related services. As a result, there are more and more business spheres where telematics can be applied.

Who Needs It

Example - the said ‘smart insurance’ Insurance companies can use telematics data about driving style of a specific client and car usage to introduce flexible custom rates. If a person drives carefully and only occasionally uses his/her car, so why comprehensive insurance policy shall cost as much as in case of a car enthusiast with an aggressive driving style, crazy about driving and a long history of accidents? It is good for insurance companies because it allows to attract more clients with flexible rates and predict their liabilities more accurately. In addition, the price formation process becomes fairer - no more situations when possible liabilities of insurance company because of aggressive drivers are compensated by careful drivers forced to pay higher rates.

Owners of corporate motor pools still use telematics to get info on usage of their motor vehicles in real time and then analyze it.

Governments of various countries also show interest in telematics technologies as adoption of such helps to improve traffic management while increasing overall safety.

What Impedes Telematics in Russia

So far, the development of automotive telematics in our country is not on the same level of rise as in the U.S. or Europe - currently the number of related projects is far less than it is abroad.

Unlike in some other technology spheres, in the sphere of telematics services one cannot just take and apply Western solutions to Russian market: requirements of insurance companies to device quality and data quantity vary enormously. Russian insurers approach this issue far more seriously as compared to their foreign colleagues.

As far as using telematics technologies in insurance industry is concerned, such systems allow companies to tailor individual insurance rates for their clients where price is contingent on driving style. In the West such approach received the following name: Usage-Based Insurance. However, insurance markets in Russia and overseas differ drastically. Here, insurance policies are more expensive and clients’ attitude toward insurance is different too (for instance, comprehensive insurance is primarily purchased by those who buy cars on credit), and companies impose on their clients tougher requirements than their overseas colleagues do, etc.

In addition, to create a working telematics product, for example, for insurance industry, one has to combine several components like hardware, software, localized maps, etc. Adopting such a complex technological product tailored for use in a foreign market to perform greatly in Russian is a tough and costly task which may as well lead to necessity to remake the device which many foreign producers are not ready to do in view of today’s market size.

Russian insurance companies are not ready to work with products offered to them without the slightest hint of adaptation to the realities of our country.

Another obstacle on the way to wide spread of telemetic technologies in Russia is absence of local state standards in this sphere. Currently the industry itself creates rules of collected data processing and transfer to various players (developers, operators, insurance companies, etc.). There are no binding global standards either: local markets are far too different, which is why each country is heading its own way.

To overcome the said obstacles the government and market participants need to join their efforts as well as invest into development of solutions tailored to work on domestic market.


Russian market of ‘smart’ automotive technologies in at the very beginning of its path, although its prospects are clear. Those companies that are currently working in this direction might as well become leaders from the vantage point of several years from now. That is where we at Smartdriving are heading to by creating an end-to-end solution with our own hardware, software and mapping.

Despite obstacles to mass adoption of telematics services in our country leading Russian companies has already acknowledged the benefits of this technology. For example, the largest Russian insurance companies are already engaged in adopting tailor-made insurance rates based on telematics, including Intouch, “”Alfa Insurance”, “Vazhno”, “Soglasiye”, “Rosgosstrakh” and “Ingosstrakh.

Number of cars using telematics equipment will also gradually increase which is encouraged by the state.

Like, for instance, in Russia, a project “Era GLONASS” has been launched that will create a system of automatic notification of emergency response services about accidents and emergencies. All new cars in Russia must be equipped with emergency response system by 2017 while it will be mandatory for passenger transportation companies to have the equipment on already in 2016.

Development of ‘smart insurance’ in the years to come will also be stimulated by the fact that insurance companies will be able to attract new clients and retain existing ones by offering them more flexible policy terms. According to insurance industry experts in the years to come we can expect an increase of 10-15% in share of Russian car owners who use smart insurance programs.

Ivan Dalidchik
17 May 2016

New Turn: How Computer Vision Will Change Auto Industry

On of the most important ‘skills’ of an autopilot is ability to analyze situation on road and make a decision to act based on information obtained from camera. Special computer vision systems are use so the car is able to recognize objects it encounters on the road.

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