Mobile phone dating apps, £50 satnavs and council bin lorries have more highly-adopted data collection and tracking technology than around 90% of the vehicle insurance industry.
That’s the view of one of the world’s leading vehicle insurance product developers, who says there could be a multi-billion pound saving resulting from a combined crackdown on vehicle accident insurance fraud and a huge shift in driving behaviour – all driven by the adoption of readily-available technology.
Johan van der Merwe, deputy chairman of pay-how-you-drive insurer Coverbox, says the vast majority of the insurance industry is operating vehicle insurance premium-setting processes dating back decades, and is urging government to dig deeper to gain a fuller understand of how insurance telematics – exchange of data between vehicle and insurer on the move – could slash vehicle accident rates significantly, and cut claims costs to insurers by a substantial amount.
“Mobile phone apps telling you if there’s a potential date nearby, and bin lorries working to carefully planned and tracked schedules, exchange more data and tracking information than most insurance companies tap into to determine whether a vehicle is being driven by a saint or a maniac – but they operate on the same principle,” said Johan van der Merwe.
“People’s driving behaviour is normally improved if they know they’re being monitored by cameras, Police officers or other types of observers; that means fewer accidents. Telematics – interactive devices developed by world leaders such as Ctrack – enables people’s driving behaviour to be observed and recorded, it helps confirm or interpret driving behaviour and vehicle movement before and during an accident, and it allows insurers to reward drivers – with lowered insurance costs – if they drive in a low-risk environment.
“Massively-advanced interactive devices are available now which can enable new levels of data provision from vehicles to which they are fitted as part of pay-how-you-drive insurance products.
“We’re developing and progressing our soon-to-be-launched behavioural insurance product at an exciting rate, and it’s all hot in the wheeltracks of a resounding report which looks set to change the way car insurance premiums are set. This moves vehicle insurance telematics two or three generations beyond current equipment capabilities – which are only adopted by a tiny percentage of the insurance industry at the moment anyhow.
“We know we shook a lot of people in the insurance industry by commissioning a report which reveals that there’s an overwhelming case for changing the way the insurance industry sets premiums – but the re-insurance industry simply cannot ignore the level of information and quantities of data available through highly-advanced interactive devices and supporting monitoring and analytics.
“The Holy Grail of the vehicle insurance industry is analysing and concluding the cause, process and effect of a vehicle accident or event – we’re currently piloting absolutely tamper-proof interactive devices which provide previously unheard-of levels of data, but which also monitor and record driving behaviour and vehicle movement for a significant period before any sort of harsh or severe event.
“There is also the potential – even now – of incorporating overt or covert video recording into the system.
“We have also carried out tests to assess various on-board telematics devices’ response to being swapped in and out of vehicles, and we’re actually quite surprised at some of the results and responses.”
Coverbox’s report into the vehicle insurance sector will be presented to a select panel of leading insurance companies in due course.
“What it reveals is that there’s an overwhelming case for changing the way the insurance industry sets premiums: we can record, analyse and compare driving behaviour as against applying insurance ‘proxy ratings’ – we get factual driving information, and base rates on driving style and location rather than lifestyle and home address,” said Johan van der Merwe.
“Ctrack’s technology is simply jaw-dropping in the context of pay-how-you-drive as Coverbox sees it.
“The report illustrates that both insurers and drivers will be better off if insurance is rated on driving style rather than lifestyle, and that good drivers don’t suffer from the behaviour of bad drivers – and Ctrack’s product and technology takes monitoring and recording to an utterly higher plane.”
Coverbox pay-how-you-drive insurance allows drivers to take out comprehensive cover paid for by the mile, with the price per mile varying according to the time of the day or night: off-peak, peak or “super-peak” times, and how the driver drives.
All Coverbox policyholders have a personal website enabling them to see precisely how many miles they are driving, and what the cost is. The technology behind Coverbox is based on proven equipment and technology.