Usage based insurance
Usage based insurance also known as pay as you drive (or PAYD)
Description:
The simplest form of usage based insurance bases the insurance costs simply on the number of miles driven. However, the general concept of Pay As You Drive includes any scheme where the insurance costs may depend not just on how much you drive but how, where and when you drive.
Usage based insurance has been strongly promoted by environmental and transport groups, mostly as a way of encouraging people to use their cars less.
New Challenge:
Vehicle manufacturers are beginning to establish partnership with insurance companies, service providers and telecom operators to offer telematics services.
Insurers benefits:
The main objectives for the Usage based insurance is to:
- Identify dangerous driving
- In terms of environment: encourage reduction of miles driven
- Reduce claims (for at least 30%)
- Reward safe driving
- Reduce speeds
- Reduce congestion
- In terms of marketing: Insurers’targets are young and old people and insurers can differentiate their offer from their competitors.
A lot of new technologies are proposed to the insurers to achieve those objectives. Now the main difficulty for them is to select the right scheme adapted to what they want to propose.
The simple scheme/product can offer to collect only mileage data while other types of complex products can aggregate road type data, driving behaviour, and car data details and transmit real time information to the billing centre.
In the meantime, data will be reworked and aggregated to provide an insurance report to the end user.
This modern form of insurance will generated a successful future for telematics products!
Description:
The simplest form of usage based insurance bases the insurance costs simply on the number of miles driven. However, the general concept of Pay As You Drive includes any scheme where the insurance costs may depend not just on how much you drive but how, where and when you drive.
Usage based insurance has been strongly promoted by environmental and transport groups, mostly as a way of encouraging people to use their cars less.
New Challenge:
Vehicle manufacturers are beginning to establish partnership with insurance companies, service providers and telecom operators to offer telematics services.
Insurers benefits:
The main objectives for the Usage based insurance is to:
- Identify dangerous driving
- In terms of environment: encourage reduction of miles driven
- Reduce claims (for at least 30%)
- Reward safe driving
- Reduce speeds
- Reduce congestion
- In terms of marketing: Insurers’targets are young and old people and insurers can differentiate their offer from their competitors.
A lot of new technologies are proposed to the insurers to achieve those objectives. Now the main difficulty for them is to select the right scheme adapted to what they want to propose.
The simple scheme/product can offer to collect only mileage data while other types of complex products can aggregate road type data, driving behaviour, and car data details and transmit real time information to the billing centre.
In the meantime, data will be reworked and aggregated to provide an insurance report to the end user.
This modern form of insurance will generated a successful future for telematics products!
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