Interesting that Vodafone has now taken an interest in telematics. Of course with semi-autonomous cars now being manufactured and developed, the question of who gets the in-car data becomes more important for everyone involved.
In future, many drivers will want to browse the web on their smartphones as a driverless car or van does the work, and phone companies have that data now of course. But the potential for mobile network operators to sync directly to a telematics app, and then trade that data with partner companies, based on the location, web history of drivers and passengers, is huge.
In theory you would only need Comp and Third Party cover when your phone was inside the vehicle, and you had logged into your phone. The network provider is the gatekeeper of that login information, so only the Theft and Vandalism cover of the parked car is left to fight over – do you see where this is going?
It’s going to be very tough for insurers to retain customers in the motor market if there is no real reward for policyholders. Those driver rewards ultimately depend on data harvesting, since those driving the least miles, on less busy roads, spending big money via smartphone payment apps and parking in secure car parks, will obtain the cheapest cover – plus offers from third party companies buying your `good customer’ data. Here’s the press info from Vodafone;
The average driver in the UK could save as much as £230 a year in lower motor insurance costs by having telematics technology fitted into their cars, according to new research from Vodafone UK.
The Incentivising Usage-Based Motor Insurance report, authored by former Treasury economist James Edgar, argues that the government should provide a financial incentive to drivers who embrace telematics technology in their vehicles. A Smarter Driving Fund, combined with cheaper insurance overall, could save the average driver around £190 and new drivers £230 a year.
With the average comprehensive car insurance costing £503 according to MoneySuperMarket, UK drivers could make huge savings from adopting telematics technology. Further research suggests that road accidents could also be reduced by incentivising people to drive safely.
The data is then shared with a driver’s insurance company via a mobile network. Based on the data, a driver’s insurance premium can change day-by-day. With support from the government, telematics technology could assist in lowering the cost of motoring, boost the environment by reducing emissions and improve air quality.
The report from Vodafone goes on to suggest that a Smarter Driving Fund could be administered in a similar way to the Plug-in Car Grant for electric and hybrid vehicles. Under this scheme, a grant is claimed by insurers and taken off the sale price of qualifying policies. The estimated cost to the Treasury of a Smarter Driving Fund is predicted to be £120 million in year one rising to £200 million over five years as take-up increases to 6%. This estimate is based on an average cost of £80 per installation of a telematics box.
Any driver taking out Usage-Based Insurance would be exempt from the £80 installation fee and save additional money from cheaper policies.
Anne Sheehan, Director, Vodafone Business, said: “Black box technology can make roads safer, reduce emissions and save drivers as much as £230 per year. Our research shows there is widespread support for the adoption of telematics technology in vehicles, especially if there is a financial incentive. We are calling on the government to do more to help drivers afford telematics-based motor insurance policies.”
Joshua Harris, director of campaigns at Brake, the road safety charity, said: “Driver error is responsible for the majority of vehicle crashes. Our roads need to be designed to eradicate dangerous driving to reduce serious accidents. This is not going to happen overnight which is why solutions that can immediately improve driving behaviour must be explored. The adoption of new technology is vital if road safety is going to improve. Black boxes can play an important role by incentivising safer driving, informing us how people drive and highlighting steps we can take to improve our roads.”
There are approximately 40 insurance companies that offer telematics-based policies in the UK.
Insurance Edge Comment;
In an era when climate change activists are calling for cars to be banned completely, and many councils are trying to de facto ban private cars more than ten years old from city centres, the idea that the taxpayer can help car drivers get cheaper insurance is a non-starter at the ballot box. No high profile politician will jump on this bandwagon – imagine the hate mob piling on via social media.