I was privileged to attend a very insightful presentation at the offices of Discovery Insure on the science of driving and the impact of insurance telematics on driver behaviour. In this post I would like to share some very important findings revealed during the presentation!
In May 2011, Discovery launched an incentive-based insurance company Discovery Insure. Built on the Discovery model of incentivising consumers to exhibit positive behaviour change, Discovery Insure has grown above expectations and are now able to provide very informative data on the driving behaviour of clients.
Anton Ossip, CEO: Discovery Insure shared key trends and analysis from the first ten months that the business has been trading.
Question: Discovery’s wellness programme Vitality has shown that with the right incentive structures in place – consumers can and do change their health behaviour for the better. Does the same apply to driving?
Insurance Telematics and Safer Driving
In earlier discussions with Anton Ossip he emphasized that it is all about “the science of driving” and the vision of Discovery Insure to reward those drivers who are driving safer. By doing so Discovery Insure intends to make a contribution towards not only the health and safety of clients, but also to road safety in South Africa.
The development of insurance telematics is regarded as the most fundamental innovation in the car insurance market and this enables insurers to calculate scientifically the risks presented by individual drivers and calculate car insurance premiums according to actual driving behaviour.
Why is Insurance Telematics so important?
“Drivers can be treated as individuals and insurers can thus truly understand the risk presented by each person.” [The Actuary Magazine February 2012]
During the presentation Discovery Insure revealed some fascinating data based on the driving behaviour of clients using the state of the art DQ Track system to measure driving.
It is important to share some insights on the sample size on which these findings were based:
- 14 700 drivers were tracked in real time with DQ-Track
- 76million kilometres of behavourial data was collected
- Clients made 174 000 fuel transactions and purchased 4.52million litres of fuel
Is Insurance Telematics capable of changing driver behaviour towards enhanced road safety?
Much of our discussions on insurance telematics tend to focus on the ability of the measurement of driving behaviour to make car insurance premiums affordable. We have recently revealed that even the Prime Minister in the UK is throwing his weight behind insurance telematics or “black boxes” as a means to reducing car insurance premiums for young drivers in the UK!
For the purposes of this post we would however like to narrow the scope of our focus to the simple question – can it make the roads safer?
In doing so I would, with the permission from Discovery Insure, like to share a very specific real time example and also focus on the communication between the insurer and the client.
What is reported to the client?
The data provided by the DQ Track system on the driving behaviour of the client is communicated to the client on a monthly basis allowing the client some very important insights on how he has been driving.
Example:
Insurance telematics and the ability to change driving behaviour
The data collected by Discovery Insure has provided a very pleasing indication on how on a monthly basis drivers have been able to change driving behaviour and reduced aspects of driving such as harsh acceleration, harsh braking and speeding!
Example:
A very specific example proved how this data allowed a parent to intervene after noticing several high risk driving activities by an au pair. This was communicated to the au pair and it can be clearly seen how the driving behaviour has changed and the number of dangerous driving activities reduced!
Conclusion:
Scientific measurement of driving behaviour through insurance telematics and black boxes is not only an important tool to deliver accurate data for the measurement of car insurance premiums. It can and should be used to change driver behaviour! The insurance industry can through technology and communication with clients promote the right health and lifestyle choices.
Car insurers such as Discovery Insure are now able to also impact on the lifestyle choice of safe driving thereby making a significant contribution towards road safety!
Also view:
Insurance Telematics and Road Safety
Lessons from Formula 1 to benefit Car Insurance
Can Insurance Telematics fill the missing link for effective traffic enforcement?
Will Insurance Telematics settle the eternal debate of who is the best driver?