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Incoming legislation signals new focus for insurance providers | Automotive World

Crispin Moger, CEO of Marmalade, discusses how telematics technology is evolving to make insurance policies fairer and more representative of customers’ driving quality 

From skipping a song on a music playlist to scrolling through a text message, many drivers still discreetly use their mobile phone while driving, taking advantage of a loophole in the law. Although currently this is not illegal, the UK government has recently passed legislation which will ban people from handling their phones when behind the wheel and close the loophole. This new legislation will afford police officers additional powers to take action against distracted drivers and will of course make people think twice about using their mobile, but can more be done to protect the safety of others?

Telematics

The latest research shows a 52% increase from 2009 to 2018 in the casualties from reported accidents where drivers were using a mobile phone, making it evident that driving distractions are more of an issue today than they ever have been. In the past, telematics technology has been used to measure driving habits like acceleration, speed, braking and cornering. This enabled people to save money on expensive insurance premiums, with safer driving rewarded through lower renewal costs.

Being able to monitor driving habits more closely will not only lead to fairer and more personalised insurance policies but crucially, safer driving

While the effectiveness of this technology cannot be disputed with Marmalade research finding it has reduced the likelihood of young drivers being involved in an accident by 73%, concerning habits such as phone handling are not currently measured. Unfortunately, monitoring the journey and motion of the car alone hasn’t prevented young drivers developing bad habits, with mobile phone use at the wheel contributing to 3% of all fatalities on UK roads.

In a bid to combat these concerning trends, some insurance companies in the UK have started to adopt more innovative technology systems which allow them to track additional driving habits. Marmalade, for instance, became one of the first insurance providers to adopt a smartphone app-based telematics system, partnering with the world’s largest smartphone-centric telematics company, Cambridge Mobile Telematics.  Using its award-winning Drivewell programme, Marmalade introduced a one-of-a-kind ‘App & Tag’ system to measure the driving habits of newly qualified drivers.

How does it work?

To put it simply, these systems track a drivers’ habits through a smartphone app. Customers who opt for this policy at Marmalade will receive a physical ‘tag’ and a link to an app. Once paired, the app and tag will interact with one another to monitor driving. The simplicity of the tech means the provider can now open the door to more drivers interested in using telematics to reduce their premium. The system monitors acceleration, braking, cornering, speed, phone distraction and crash detection

The app allows drivers to keep a track of every journey, monitor where they might have gone wrong and how to improve. Elements of gamification throughout the app means the driver can build streaks for good journeys, achieve badges and in turn save money at renewal.

The key distinction between this technology and traditional black box policies is its ability to measure phone distraction. The app monitors the phone itself so as soon as it is interacted with this is tracked. If the car is in motion and the screen is touched drivers could see a reduction in their driving score, and excessive use could ultimately result in a premium increase, particularly if it is combined with other dangerous driving events.

Early data from the system is extremely encouraging with phone distraction declining by an average of 26% from the first to the third month of the policy. The app has also influenced improvements for drivers who had been identified as driving at risk on more than one occasion in the first month. The app recorded reductions between month one and three in the following for these specific drivers: 37% reduction in those at risk of speeding, 12% reduction in hard braking, 30% reduction in harsh cornering and 38% reduction in phone distraction.

Another issue this technology has been able to address is around car sharing. A new car may not be affordable for many young drivers which often results in them sharing a car with their parents. As the app and tag system can monitor who is driving a vehicle, newly qualified drivers can have their own policy on a parent’s car. This means they can earn their own No Claims Discount to reduce their future premiums, even when they aren’t insured as the primary driver.

The key distinction between this technology and traditional black box policies is its ability to measure phone distraction. The app monitors the phone itself so as soon as it is interacted with this is tracked

The way forward

Being able to monitor driving habits more closely will not only lead to fairer and more personalised insurance policies but crucially, safer driving.  Having personalised policies which reward young drivers for their driving style and changing needs will only become more popular as young drivers search for the most competitive premiums. The pandemic has escalated the desire for more flexible policies, such as ‘pay as you go’ insurance, placing further pressure on insurers to embrace this technology where possible. In the longer term future advancements such as camera technology are likely to be incorporated into devices as well. This would help to understand the circumstances of an accident more clearly, and to establish who is at fault more reliably, protecting the users of the system further.

Insurers have a responsibility to be adaptable in meeting the needs of new drivers and the incoming legislation represents an acknowledgement to the changing dangers on the road. The importance of systems designed to make driving safer for all road users while providing customers with access to more representative premiums simply cannot be overlooked.


About the author: Crispin Moger is Chief Executive at learner and young driver insurance specialists Marmalade

 

 

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