UK: Norwich Union appoints IBM and Orange for Pay as You Drive™ Insurance

12 March 2003

Norwich Union has signed a deal with IBM and Orange UK to provide the technology and telecommunications for its revolutionary �Pay As You Drive�� * insurance programme.

The UK�s largest general insurer�s innovative venture will see data collected from a telematic device in a customer�s car and an insurance premium calculated based on when, where and how often the car is used.

Based on its expertise in the automotive and insurance industries as well as in telematics technology, IBM has been chosen by
Norwich Union to provide the telematic architecture, hardware and software, and device specifications, to support this innovative approach to insurance.

Orange, the UK�s most popular mobile communications company, will supply the robust and highly secure telecommunications
network infrastructure. The Orange network will transmit data from vehicles to Norwich Union.

Robert Ledger, �Pay As You Drive�™ programme director at Norwich Union, said: �Behind the scenes, we have taken the time to choose the right partners. This is a major research and development programme with Norwich Union customers, and it is essential we have leading experts in these industries with proven ability to
deliver as well as maintain superior customer focus.

�Both IBM and Orange have shown the pedigree and vision to work with us on this exciting venture.�

Bill Pieroni, general manager for IBM Global Insurance Industry, said: �Telematics technology is already proving its tremendous
value to drivers and passengers with added safety features, new
services, and entertainment. Now we want to help determine
whether this on-demand approach to insurance coupled with IBM
services and infrastructure can benefit the insurance industry and
motorists with more accurate insurance premiums based on actual
vehicle usage.

�This is a clear example of how IBM can bring together its world-leading technology expertise to help new partnerships across
different industries forge pioneering product and service innovation.”

Neil Laidler, head of corporate customer development, Orange Business Solutions, added: �Orange is committed to delivering
innovative services that simplistically enhance people�s lives. We
are delighted to bring what we have learnt from developing �pay-as-you-talk� solutions to help Norwich Union deliver a revolutionary insurance service to its customers.�

Norwich Union has an exclusive agreement covering the UK and Europe with pioneer US insurer Progressive to use data collected
via telematic technology and the company�s unique pricing method to calculate premiums. This heralds a major breakthrough in the calculation of more accurate motor insurance premiums, giving the customer greater control, flexibility and choice.

�Pay As You Drive�™ is due to be piloted this year with 5,000 volunteer motorists. Any customers interested in taking part in the pilot, which will last up to two years, can register at or e-mail [email protected]

About Norwich Union

Norwich Union Insurance is the UK’s largest insurer with a market share of around 16 per cent and is more than 1.5 times the
size of its nearest rival. It is also the largest personal lines insurer.

It has a focus on insurance for individuals and small
businesses. It insures:

  • one in five households
  • one in five motor vehicles
  • more than 700,000 businesses

* Progressive (NYSE:PGR), with headquarters in Mayfield Village, Ohio, is the fourth largest motor insurance company in the US. In business since 1937, the company provides all drivers in 48 US states and the District of Columbia with competitive rates and 24
hour, in-person and online services.

About IBM

IBM is the world’s largest information technology company, with 80 years of leadership in helping businesses innovate. IBM
offers a broad range of capabilities – consulting, IT services,
hardware, software, research and financing — to help companies
of all sizes realise the full value of information technology.

IBM works with specialist IBM Business Partners to deliver an advanced, flexible and reliable portfolio of Telematics Solutions. Addressing issues such as safety, privacy, convenience and
connectivity, our in-vehicle information systems and solutions
enable our customers to deliver hands-free and eyes-free
technology as part of developing invaluable and long-term
relationships with their customers. Through its specialist industry
consulting, services and solutions, IBM helps its customers,
including insurers, to achieve economies of scope and scale,
reduce their capital costs, cut expenses and offer new products
and services faster.

To learn more please visit

About Orange

At the end of December 2002, Orange UK had over 13.3 million active customers, more than any other UK network, making it the
UK�s number one.

The fifth annual J.D. Power and Associates UK Mobile Customer Satisfaction Study published in May 2002 showed that Orange
ranks as the number one telephone service for customer satisfaction in the contract sector in the UK. In September 2002 Orange UK won the Mobile Choice consumer award for Best Network; Mobile Choice said �Orange received glowing accolades for every aspect of its service � coverage, reliability, customer service and tariffs.�

Orange UK provides high quality coverage to 99% of the UK population, and offers roaming to pay monthly customers on 287
networks in 127 countries and to pay as you go customers on 24
networks in 19 countries.

Orange, wirefree and any other Orange product or service referred to in this release are trademarks of Orange.

Information about Orange can be found on the Orange website at and media information can be found at