Steve Kerrigan, Senior Vertical Market Manager, Insurance & Connected Car, LexisNexis Risk Solutions, UK and Ireland, and Chris Pryor Head of Insurance Development of Autosaint, take a look at how UK driving patterns have changed since the Covid-19 lockdown.
In July 2020, some of our freedoms were restored – a visit to the cinema, a socially-distanced drink at the pub, a haircut. While traffic levels have gradually increasedi, many people in office-based businesses that have successfully transitioned to home working remain in ‘work from home’ mode. For the motor insurance market, the question remains to what extent driving behaviour changed during lockdown and for how long this will remain the case.
Telematics data provides the level of insight the market needs to understand how driving behaviour has changed.
LexisNexis Risk Solutions teamed up with Autosaint, part of the multi-award winning Fresh Insurance Services Group Ltd to analyse over 10 million customer journeys, covering 43 million miles driven from 10th March to 15th June. This is what they found:
April and 23rd April
· As lockdown eased with non-essential shops open from the 15th June, traffic was still down by a third on average, compared to 2019. (Follow-up analysis shows traffic has remained down by a third on average into the start of August).
· During lockdown, traffic at the weekends saw the biggest fall – dropping by 70-80% compared to the same period in 2019.
Chris Pryor, Head of Insurance Development, Autosaint, said: “With emptier roads, the national assumption was that speeding became more prevalent. That may have been true in the wider motoring population but was not generally reflected in the driving behaviour of our customers.
Yes, we did see an initial marked deterioration in behaviour when the lockdown was first announced – perhaps caused by a sense of panic – but this soon eased. In fact, when hospital admissions were at their highest, our customers stayed at home, respecting the lockdown. On 29th March, we saw an 85% fall in Traffic.
“Looking across the whole period, our conclusion is that the psychology of the nation was and continues to be reflected in driving behaviour. The insight we have from telematics has put us in a far more powerful position to understand this changing risk and support our customers as they slowly get back on the road.”
Steve Kerrigan, Senior Vertical Market Manager, Insurance and Connected Car, LexisNexis Risk Solutions, adds: “We’ll be closely monitoring this on behalf of our customers to help understand if the sustained reduction in vehicle use is the new normal or whether in fact car use will increase due to concern over using public transport.
“If the significant reduction in vehicle use looks set to continue, the appetite for mileage-based insurance could increase. A consumer study by LexisNexis Risk Solutions shows there was pent up demand for mileage based policies well before lockdown.
“In the study, 78% of consumers said a flexible premium based on miles driven and driving style would be their main motivation for taking a telematics policy and 53% said that keeping track of the miles they have driven was an appealing aspect of telematics. This is consistent with the same study conducted in 2017iv.
“The appetite for mileage-based insurance has been evident since we first researched consumers in 2017, but the pandemic has heightened that demand. Those insurance providers already offering telematics are in a strong position to develop their propositions to meet this need.
“Collecting mileage data direct from the vehicle’s odometer is the next phase in the delivery of more personalised motor insurance products. We are already creating the links with the car manufacturing sector to deliver this data direct into the insurance market in a usable and compliant form. The pandemic is accelerating developments in vehicle-centric data for fairer, more flexible motor insurance, helping the market respond to the changes in consumer work and travel.”