Quantifying a good driver is not possible. Should each insurance contract be personalized?

What makes a good driver? Is it your vehicle? Your age? Your gender? Or where you live?

No one can object, that each of us is a unique individual. Coming from different backgrounds and having different priorities in our lives, we continue to learn our life lessons.

Are you a good or bad driver?

According to statistics, each year 1.3 million people die in car accidents. Young adults aged from 15 to 44 years old account for more than half of all road traffic deaths.

Yet, this number does not take into consideration smaller accidents or accidents with no deadly outcome. But I am certain, it is not higher than the total number of vehicles on the road – 1.2 billion.

Generally, before you opt for your car insurance policy, the insurance company will ask you typical questions about your age, your gender, your vehicle, your driving license or the area where you live.

They might also know that in the past 10 years you haven’t caused an accident. But do they really know how good of a driver you really are?

The insurance companies also do not have any insights, into how much you are putting yourself and other participants on the road at risk, by your distracted driving, speeding, risky overtaking or reckless behavior.

For the reasons mentioned above, your profile is mostly generalized to the majoritarian drivers of your age, with the same type of vehicle of the same gender. 

Let’s just assume that you are a good driver, you have a better chance of obtaining a cheaper policy. If not, you might end up paying more, or the same amount.

Hardware black boxes, are they any good?

To dig a bit deeper and gain more valuable insights about your behavior behind the wheel, some insurance companies that run a user-based insurance (UBI) program, will provide you with hardware, typically a black box.

Although black boxes have access via CAN bus to most accurate built-in sensors in the vehicle, they don’t provide you with a real-time overview of your score and don’t detect distracted driving. In addition, the device itself tends to be quite expensive, with a small return of investment rate.

To take it one step further, you need to install the device, which tends to be a cumbersome process, for the majority of us, as not everyone is “Handy-Andy“. If that is the case, usually you would need to make an appointment at the certified service, drive your vehicle down, leave it there for a couple of hours and then finally pick it up.

If we take it from a slightly different angle and say that one shares the vehicle within the family, perhaps with husband or wife, or even a teenager, how does the insurance company know who that data obtained from a black box really belongs to?

What about app-based telemetry?

The app-based telemetry, represents a simple, well-engaged Uber-style experience for casual drivers, as it utilizes high-end smartphone sensors such as GPS, accelerometer, and gyroscope to calculate the driver’s behavior. 

Not only speeding, cornering, harsh braking or acceleration but also distracted driving, anytime you touch the mobile device.

Today, we are so rushed and so busy, that the majority of us tend to forget even our mundane tasks.

The insurance company needs additional time to process your driving data from the black box and the feedback is far from instant. I would argue that delayed feedback from your way from work several hours ago, will have any positive impact on your driving style.

Today’s mobile devices are so powerful, that you are able to run the calculations directly on the device, providing a real-time feedback to the driver, almost like a coaching experience directly on the spot, whether it’d be via audible or visual alerts, all the while sending it off directly to the insurance company’s server for their analysis.

Engagement

I think we can all agree, that its hard to have a “relationship” with the black box or a dongle, as once it is installed, it is just there, plain and simple.

The added benefit of utilizing an app-based telemetry solution comes with a well-build, state-of-the-art application, which will put a lot of emphasis on the UX/UI, includes gamification and perhaps will even reward the best drivers, whether it would be at provincial, state or even national level.

And these are just some of the highlights, why app-based telemetry is here to stay.

Real User-based insurance

The app-based telemetry which Sygic has successfully integrated into apps for several insurance companies and telco operators is an essential part of the future in User-based Insurance (UBI) also known as pay as you drive (PAYD).

By providing you instant feedback on your driving style and involving gamification elements it actually has an impact on how safe you drive. 

At the same time, it gives the insurance companies the opportunity to be fairer and identify good drivers by personalized data, and let the bad drivers pay the bills.