What if liability premiums were based not on demographics and DMV records but on actual driving habits? That's the idea behind Norwich Union's newest business. In a pilot program launched last year, the British insurer began to track 5,000 customers by placing GPS receivers in the trunks of their cars. Data from the devices will be used to adjust drivers' premiums from month to month. "We calculate everything from speed and acceleration to whether they're braking too early or too late at intersections," says project manager Robert Ledger. So far Norwich Union has collected data on about 1 million journeys, and its statisticians are using the information to recalculate its insurance tables. Next year it will make the technology available to the rest of its 3.5 million auto customers, hoping that the feedback will lead to fewer accidents -- and thus higher profits. "Over time," Ledger says, "we think we can change people's behavior and make them safer drivers."
Or check out the actual features at Norwich Union:
Features of the Pay As You Drive’™ For Young Drivers product include:
- a tariff per mile, with the rate personalised to each customer and dependent on the time of day the car is driven
- the first 100 off peak miles each month are free
- young drivers could see a saving of up to 30% a year off the cost of their premiums
- premiums are billed monthly – premiums will vary monthly if customers vary their driving
- there is a one-off fee of £199 fo
r the telematic device – this is expected to cost less than the savings to be made in premiums.
- the box has a built in car locator – enabling customers to have their car located if there’s been an accident, breakdown or if it has been stolen
Now, could this data collected be indicators of future success in say, bill payments, return-to-work predictors, or fradulent actions?
