Insurance telematics services provider Octo Telematic is using real-time weather data from IBM and The Weather Company as critical input for its driver behaviour scoring app Octo U.

Currently launched in the UK, Italy and Spain, Octo U is a free mobile app that uses proprietary algorithms based on GPS point-retrieving technology in order to offer personalised pay-as-you-drive or usage-based insurance quotes based on driver behaviour.

The algorithm is used to collect journey information and rank each trip based on several factors such as speed, breaking, acceleration and weather-affected variables such as road and traffic conditions.

"We’re able to digest real-time information on road conditions and get a better view of driving habits."

Octo is holding advanced talks with insurance partners to launch this model in several international markets.

With access to The Weather Company’s current weather API through IBM Insight Cloud Services, the app develops a more reliable and exact scoring algorithm based on the weather conditions at the precise place and time of the journey.

Weather data is considered to be an important aspect in refining the risk-scoring algorithms to analyse driver behaviour.

According to US Federal Highway Administration data, around 1.3 million weather-related vehicle crashes occurred on an average each year in the country from 2002 to 2012.

Octo Telematics CEO Fabio Sbianchi said: "Until recently, insurers have had difficulty creating unique profiles on which to offer auto insurance for individuals.

"By integrating weather data from IBM and The Weather Company with other data streams, we’re able to digest real-time information on road conditions and get a better view of driving habits.

"We already gather, process and store up to 228,000 data points every minute resulting in 191 billion data points analysed to deliver insights every year. Telematics and UBI let insurers move from analysing aggregated historical information to processing large volumes of near real-time data. Octo U will both use the insights gained from this experience and help the evolution of big data analytics."