For
hard-pressed consumers, catching a break on car insurance premiums
might become easier thanks to pay-how-you-drive technology developed by
Quebec-based Baseline Telematics.
“Drivers can’t control their age, gender or where they live, but they can control their driving habits,” says Paul-André Savoie, president and chief executive officer of Baseline Telematics. “The program is hugely popular with young drivers, who typically pay high premiums. They now have control over how much insurance they pay and an incentive to drive safely.”
A small wireless data collection device in the vehicle gathers information about speed, acceleration, braking and distance travelled. These four factors are used to determine insurance risk. Each month a premium is calculated based on the results during that period. Over the next 30 days drivers can address weaknesses, such as speeding or hard braking, and lower their premium for the following month.
A collaborative approach brought teams together from Baseline Telematics, Industrial Alliance, and SAP Canada to develop the technology.
Industrial Alliance was looking for a way not only to change the way insurance is sold, but to change driving habits and ultimately save lives, says Savoie. The result was the Mobiliz program that has been available in Quebec since April, 2011.
“We partnered with SAP because they have the big data capabilities that we need to collect, manage and analyze an almost unlimited amount of information in real-time,” explains Savoie.
For SAP, the technology completes a suite of services provided to its 1,000 insurance company clients around the globe. “It’s a disruptive technology that brings choice and behavioral change allowing drivers to help themselves,” says Richard Daukant, national vice-president of strategic engagement with SAP Canada. “For insurance carriers, it’s become an ‘ignore it at your own risk’ opportunity.”
In Canada, there are currently over 25,000 subscribers to the pay-as-you-drive telematics program spanning Alberta, Saskatchewan and Quebec. Discussions with insurance regulators in Ontario are underway; it is expected the program will be launched in the province during 2014. There are also pilot projects with a dozen insurance carriers around the world, including Australia, France, Germany and Chile, adds Savoie. A program for motorcycles is under development for riders in Saskatchewan.
The program is bringing a seismic shift for actuaries and how they calculate risk, says Daukant. “Instead of using data from years past to calculate risk they can use information from the past 30 days.”
It’s also changing customer communications. “Insurers are now connecting with customers four times a month via email to let them know how they been driving and if they have incurred any infractions,” he says. “Open rates on communications are at 87% — people actually want to hear from their insurance company and that’s a pretty dramatic shift.”
This is a transformational technology, says Savoie, “I believe pay-as-you-drive programs have the capability of insuring one of every two cars in the next five to 10 years. And when you look at the $20-billion in car insurance sold annually in Canada alone, the market potential is astronomical.”
source: Special to Financial Post | January 7, 2014 6:00 AM ET
http://business.financialpost.com/2014/01/07/a-joint-venture-with-sap-taking-control-of-car-insurance-premiums/
“Drivers can’t control their age, gender or where they live, but they can control their driving habits,” says Paul-André Savoie, president and chief executive officer of Baseline Telematics. “The program is hugely popular with young drivers, who typically pay high premiums. They now have control over how much insurance they pay and an incentive to drive safely.”
A small wireless data collection device in the vehicle gathers information about speed, acceleration, braking and distance travelled. These four factors are used to determine insurance risk. Each month a premium is calculated based on the results during that period. Over the next 30 days drivers can address weaknesses, such as speeding or hard braking, and lower their premium for the following month.
A collaborative approach brought teams together from Baseline Telematics, Industrial Alliance, and SAP Canada to develop the technology.
Industrial Alliance was looking for a way not only to change the way insurance is sold, but to change driving habits and ultimately save lives, says Savoie. The result was the Mobiliz program that has been available in Quebec since April, 2011.
“We partnered with SAP because they have the big data capabilities that we need to collect, manage and analyze an almost unlimited amount of information in real-time,” explains Savoie.
For SAP, the technology completes a suite of services provided to its 1,000 insurance company clients around the globe. “It’s a disruptive technology that brings choice and behavioral change allowing drivers to help themselves,” says Richard Daukant, national vice-president of strategic engagement with SAP Canada. “For insurance carriers, it’s become an ‘ignore it at your own risk’ opportunity.”
In Canada, there are currently over 25,000 subscribers to the pay-as-you-drive telematics program spanning Alberta, Saskatchewan and Quebec. Discussions with insurance regulators in Ontario are underway; it is expected the program will be launched in the province during 2014. There are also pilot projects with a dozen insurance carriers around the world, including Australia, France, Germany and Chile, adds Savoie. A program for motorcycles is under development for riders in Saskatchewan.
The program is bringing a seismic shift for actuaries and how they calculate risk, says Daukant. “Instead of using data from years past to calculate risk they can use information from the past 30 days.”
It’s also changing customer communications. “Insurers are now connecting with customers four times a month via email to let them know how they been driving and if they have incurred any infractions,” he says. “Open rates on communications are at 87% — people actually want to hear from their insurance company and that’s a pretty dramatic shift.”
This is a transformational technology, says Savoie, “I believe pay-as-you-drive programs have the capability of insuring one of every two cars in the next five to 10 years. And when you look at the $20-billion in car insurance sold annually in Canada alone, the market potential is astronomical.”
source: Special to Financial Post | January 7, 2014 6:00 AM ET
http://business.financialpost.com/2014/01/07/a-joint-venture-with-sap-taking-control-of-car-insurance-premiums/
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