Some of us may not want to admit it,but we may need to be incented to drive better. Response to this seems to be leading to lower insurance rates for a typically expensive category of drivers. Our question to you: as good as this seems, is the change sustainable without costs exceeding value?
Telematics as a social initiative …
Back in April, Industrial Alliance launched Mobiliz, which the insurer described as “a societal initiative aimed at improving driving behaviours and combating the speeding plague among drivers aged 16 to 24.” It set our to achieve this objective with the use telematics devices to base premiums for the younger drivers “on the drivers’ behaviours (rather) than on their being part of a specific age group or on their claims history.”
As further incentive, the Mobiliz program offers a free one month trial of the service and if, after the first month, the driver adopts ‘responsible’ driving behaviour, the website promises “You will get up to 25% discount on your premium and your mileage.”
Does this not-so-subtle approach work? First results are now in and, in a press release, the insurer reports, “52% of young insured have already improved their driving behavior thanks to this innovative program”.
As or more significantly, in our view, Michel Laurin, president and CEO of operations for Industrial Alliance, Auto and Home Insurance Inc. is quoted in the release as saying, ““In addition to this enviable performance of Mobiliz’s participants, it should be emphasized that the majority of them keep pace and keep improving steadily,” adding that the results, “confirm that the positive reinforcement program works and it brings real behaviour change among young drivers”.
Incentives beyond lower premiums ….
Industrial Alliance is the first insurer in Canada to take this approach with younger drivers, but there is a similar model in the UK which is extending incentives beyond premium discounts. Back in September, we blogged on activities of ingenie, an insurer set up to target young drivers with a similar approach. The premiums are adjusted frequently (every 3 months) based on driving behaviour, and the website explains how feedback is provided to the driver through social media, using a green, red, yellow coding scheme.
ingenie is extending its incentives by partnering with a driving school and with Vauxhall, a car manufacturer with “a city car, the Adam (launching in 2013) whose trendy appeal, affordability and low insurance grouping makes a perfect package with ingenie.” It seems there are lots of benefits being offered for a driving group that was not typically popular among insurers.
Is the value sustainable?
So, it seems that younger, male drivers can be led to better driving behaviour with telematics driven incentives. However, these schemes are still in the early days. As the Mobiliz data suggest, 48% of the drivers haven;’t got the message yet.
We wonder if the behaviour change is real and sustainable and actually lowers claims costs, or will drivers continue to look for premium and other incentives in excess of the benefits offered.
What do you think? Leave a comment below.