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The Co-op uses tech for behaviour-dependent young driver insurance

The Co-op uses tech for behaviour-dependent young driver insurance

A new way for insurers to address the ban on gender bias-based insurance?

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The Co-operative Insurance group has launched a product for young drivers where the premium paid is adjusted depending on driving behaviour.

A GPS ‘Smartbox’, from telematics solution provider Wunelli, is fitted in the driver’s car and sends data on the driving behaviour to the company, which processes it against four criteria to produce an overall score.  

The score, which is based on the braking and acceleration, how fast corners are taken, speed and time of driving (the premium is higher for night-time users), is then used to determine whether the driver receives a discount on their premium, or if their premium goes up.

Co-operative Insurance uses tools developed in association with Wunelli to analyse the data in order to understand customers’ driving behaviours and to better understand the market.

However, it said that only its customer data, rather than the telematics data from the Smartbox, is analysed for customer relationship management (CRM) purposes, using “standard marketing analytics tools”.

The insurance product is aimed at 17 to 25 year olds, and the initial premium is based on standard young driver statistics. However, every 90 days, if the customer drives well and gets a high score (which they can view on an online ‘driving dashboard’), they will receive a ‘safer driving discount’ on their next monthly payment of up to 11 percent of the annual premium. If the opposite happens, the insurance premium could increase by up to 15 percent.

The company believes that the use of telematics technology is useful for addressing the recent EU ruling that dictates that insurers will no longer be able to price their products based on gender.

“Telematics allows us to address this issue as we may no longer have to make assumptions about the way someone may drive based on their sex, for example, instead we can price them based on how they actually drive,” said Grant Mitchell, head of motor insurance at The Co-operative Insurance.

Meanwhile, the company said that other applications for its technology could include identifying fraud.

“We can see that this technology will be able to help us identify fraudulent claims – particularly where third parties may make claims against our customer about the speed at which they were travelling when an accident occurred. This will help reduce the incidence and impact of staged accidents,” said Mitchell.

He added: “We can see a point where our claims teams can be advised in real time of an accident and its location and arrange for emergency and recovery vehicles to attend the scene much more quickly.”

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