The most serious mistake a company can make is to fail to learn from its past mistakes. Aviva is demonstrating that it takes that old adage to heart. The insurer has reentered the telematics based insurance market in the UK, with some very interesting elements, showing that Aviva spent some time learning from its own mistakes as well as the mistakes (and successes) of others.
Our question: Will this encourage Aviva Canada to bring forward a revised ‘Autograph’ program?
The background …
In 2008, Aviva, through its Norwich Union subsidiary, folded its telematics-based insurance program due to lack of interest. This was widely cited as evidence that usage-based insurance (UBI) was a non-starter.
At roughly the same time, Progressive Insurance restarted its own UBI offering with the ‘Snapshot’ brand. Progressive had a similar uptake challenge, but addressed it by making its program more user friendly, and setting its ebullient ‘spokeswoman’, Flo, on the case. with perky, cheeky marketing, including a free trial period. By most accounts, Progressive has come to dominate the personal insurance telematics space in the US.
So what’s changed?
Aviva’s new offering has some of the same elements as Progressive. In August of this year, it offered a trial program to users which allowed the consumers and the company to test the value of the program in their own cases and to shape the final components of the program.
In addition, Aviva’s model uses the driver’s mobile device to track usage with a ‘RateMyDrive’ android app (as opposed to a device embedded in the vehicle). While there are trade offs in the amount and type of data that can be collected. the mobile device approach offers an easier adoption for a large number of users, according to Jonathan Burdett, a director for PwC in the UK, cited in Insurance & Technology.
The timing is good, as well. Shortly, the EU directive banning the use of gender in insurance underwriting will become effective, putting upward price pressure on automobile premiums for women. Joe McPartlan, Motor Underwriting Manager, QBE Ireland, recently wrote, “(u)sing Telematics to set premiums according to customers’ risk profiles allows the industry to keep offering lower prices to most women while staying on the right side of the law.”
Is Canada on the expansion list?
We wish Aviva well with its offering in the UK.
We wonder whether this will drive Aviva Canada to follow suit. In 2005, Aviva Canada was the first Canadian insurer to introduce a telematics based automobile insurance scheme. It was subsequently withdrawn in 2011.
Will we be seeing a revival here as well? What do you think?