In-vehicle telematics data to change the way driver insurance premiums are set

New report from insurer Coverbox and monitoring technology provider Ctrack suggests vehicle insurance should be based on driver behavior as revealed by in-car telematic information, rather than assessments of driver ‘lifestyle’

In-vehicle telematics data to change the way driver insurance premiums are set

A report produced by pay-how-you-drive insurer Coverbox and vehicle tracking and movement monitoring technology provider Ctrack argues strongly in favour of changing the way driver vehicle insurance is assessed. 

The findings of the report, yet to be revealed in full, show that driver vehicle insurance should be based on driver behavior as revealed by in-depth vehicle telematics, rather than vague ‘lifestyle’ assessments.

A clear demonstration that Ctrack is able to comply with Coverbox’s 18-point device strategy means that Ctrack’s massively-advanced interactive devices will soon be establishing new levels of data provision from vehicles to which they are fitted as part of pay-how-you-drive insurance products, Coverbox said. 

Behavioural insurance product

Speaking at Insurance Telematics 2012 in London, Johan van der Merwe, deputy chairman of Coverbox, (pictured right) said: ‘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. 

‘We have a clearly-defined device strategy,’ continued van der Merwe, ‘built around financial and supply security of the device company, as well as installation standards and control of tamper and removal security – and Ctrack meets and even exceeds our requirements. 

‘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 the Coverbox-Ctrack combination will make available through a highly-advanced interactive device and supporting monitoring and analytics. 

Tamper-proof interactive devices

‘The Holy Grail of the vehicle insurance industry is analysing and concluding the cause, process and effect of a vehicle accident or event – without giving the game away, 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,’ said van der Merwe. 

He added: ‘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.’ 

Saleem Miyan, managing director of Ctrack Europe Holdings, (pictured left) said: ‘Pardon the pun, but we’ve been looking for a vehicle for our two-generations-on insurance telematics technology, and it is pretty clear that Johan van der Merwe and his Coverbox team have a vision and understanding which provides that vehicle. 

‘Coverbox’s team are not “make-do” guys – we’ve walked into an environment in which not only do they recognise Ctrack’s potential impact, they’ve embraced it and catapulted it forward even further.’ Coverbox’s report into the vehicle insurance sector will be presented to a select panel of leading insurance companies in due course, the company said.

Driver behavior not lifestyle should determine insurance premiums

‘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 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. 

Ctrack in the UK and Ireland are divisions of DigiCore Holdings, a global company listed on the Johannesburg Stock Exchange. Under the Ctrack brand, DigiCore offers a wide range of vehicle location, personal and lone worker tracking, fleet and work flow management, satellite navigation and security tools. 

Written by Wireless magazine
Wireless magazine

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