UK car insurance comparison site Tiger recently reported a dramatic rise in sales of telematics car insurance policies. Sales figures for the first four months of the year show that there has been a 25 per cent rise in sales of telematics insurance. More than one in seven policies sold through Tiger.co.uk in April was a telematics-based policy and that figure is expected to rise.
Telematics policies, sometimes known as 'pay as you drive' or 'black box' policies, involve a tracker being installed in the car to record a motorist’s driving habits. Armed with this data the insurer is then able to adjust how much the driver will have to pay based on their insurance risk. Careful driving is rewarded but drivers with habits such as hard braking and aggressive acceleration are considered more risky. Because of these factors, telematics-based car insurance can be a more affordable option for safe young drivers than standard car insurance but, as evidenced by telematics statistics published by Tiger.co.uk earlier this year, these products are popular with older age groups too.
Consumer interest
Accenture’s 2011 UK motor insurance survey explored consumer attitudes to this product proposition. It confirmed that again, when linked to price, there is potentially a high level of consumer interest, with 82 per cent of consumers saying they might be convinced to try telematics if it could help them achieve a lower premium.
In light of the EU gender ruling, which ruled out cheaper policies for female drivers, affordability issues for young drivers and the falling cost of telematics technology, many feel that the time is right for substantial growth in this area of the market.
Perhaps surprisingly, the strongest interest was with the mid-age (25-44) and mid-to-upper income brackets, suggesting that telematics may have a wider appeal than the traditional, more widely touted, younger driver target market.
A reduced accident rate would seem inevitable with systems like BetterDriver actually coaching drivers to use the road more safely.
Better driver
The Mercurien BetterDriver service helps new drivers by delivering immediate, audio-feedback on hard cornering, hard acceleration, hard braking or erratic lane-changing.
“We have designed BetterDriver specifically in response to the crash rates for P-plate drivers who are most at risk in the first years of driving,” Mercurien CEO Michael Graham said. “The number of accidents per month increases dramatically when drivers cross the threshold from L to P plates. The statistics are compelling and we felt we had the chance to make a positive difference,” he said.
Mercurien’s BetterDriver system consists of a Skymeter unit powered by the car’s electrical system. The unit has two major functions: it is a highly accurate GPS transmitter and its sensitive ‘accelerometer’ function monitors the vehicle’s movement in terms of normal or excessive driving behaviour. In the event of hard braking, cornering, acceleration or lane changing, the unit emits a clear audio signal to the driver. The audio signals are graded to represent the severity of any at-risk actions, so people can adjust their driving actions.
“The BetterDriver individual websites show the route the vehicle has taken, time, distance and the manner in which the vehicle has been driven,” Graham said. “As well as illustrating any at-risk actions over time, the system also reports an eco score that helps young people to drive in a manner that minimises green house gas emissions.”
He said BetterDriver was currently in detailed testing with some of Australia’s largest motoring organisations and had also attracted interest from AAMI, which will offer a 20 per cent reduction in comprehensive insurance premiums to the first 1000 drivers who install the BetterDriver system and 10 per cent thereafter.
“After insurance discounts, BetterDriver will cost less than most people spend on coffee a week,” he said.”
AAMI’s Corporate Affairs manager Rueben Aitchison said: “If people are prepared to take the step to have this system in their car then we are prepared to recognise that with lower premiums.”
More at: www.betterdriver.com.au