Fairer, friendlier car insurance – an oxymoron challenged?

It is broadly acknowledged that buying car insurance is not the average consumers most pleasurable experience.?A 2020 moneysavingexpert.com survey found that 38% of drivers say it’s too much hassle to change insurance provider.?Feedback cites an absence of transparency, value and fairness.?The pandemic, as we all know, has exacerbated perceptions that insurers are, by and large, blind to sentiment and intent only on profit.?Ah well, it has for ever been so.

Yet, with the welcome new rules against ‘price-walking’, January this year marked the end of higher prices for existing policyholders compared to their new counterparts. ?Insurers must find innovative ways to offer better value to consumers and one way surely is to use more informed and actionable data on drivers to best effect.?So, we thought we’d ask two thousand UK consumers for their thoughts (for the third year running) on communication from insurers around:

·??????Benefits of telematics-based insurance

·??????Potential benefits in fairer pricing

·??????Improved road safety

·??????Environmental impacts of driving behaviour

Our results are both interesting and alarming, and most certainly herald opportunity.?But let’s start with the headline:

·??????4% of our sample have received any communication from insurers on a telematics-based policy.

Yes that is correct: of the 2000 drivers surveyed, just 80 people have been approached to adopt a fairer, safer, more environmentally conscious policy.?How so??

Let’s scrutinise a little.?Our survey also revealed an absence of awareness and education on telematics data.?Specifically, how it can be of value for you, the consumer, in designing your policy.?That data presents a view on risk - how your driving style and capability and routes impact the likelihood of you making a claim - that is more detailed, nuanced and advanced than the typical postcode/parked on/off street deliberations.?Secondly, insurers can help you, the driver, evolve your way of driving to be safer and more emissions efficient.?Lastly, in the event of a claim, there is granular data available to manage claims more fluently and fairly for all involved.

By way of a conclusion, let’s imagine how that conversation goes:

Old way

Insurer:?????????????Good morning Mr Little.?You are due to renew your car insurance on the 5th of next?month.?Your premium will be the same as last year.

Mr Little:????????????I’m sorry I am very busy please send me an email

Telematics way

Insurer:?????????????Good morning Mr Little.?You are due to renew your car insurance on the 5th of next month.?If you give us the opportunity to gather data on your driving habits, you could save 20/30% on your next premium.

Mr Little:????????????Really??Please tell me more……

Is it so difficult??We at REDTAIL know that we can do more to educate on telematics benefits.?We are utterly committed to supporting insurers and brokers with data that informs their data.?Data that can offer compelling reasons for consumers to adopt the best value and fairest policies in pursuit of safer and more environmentally friendly driving.