In September 2019, All-Connects was contacted by the AP Hogeschool Antwerp. As part of the marketing course, students were asked to conduct a market research project on a current, socially relevant topic. Out of quite a few submissions, our research proposal "Is the consumer interested in a discount on the insurance premium based on driving behavior" was chosen by 4 students. We decided to find out whether or not drivers are willing to have their driving behavior analyzed in exchange for a discount on the insurance premium, and whether insurers are willing to grant this discount. In this blog you will discover the rather surprising results of the study from the perspective of the insurers. In a second blog you will read what the consumers think about it.
Before we dive into the results of this survey, a brief sketch of the parties surveyed is necessary to place and understand the information in this blog. A total of 9 insurance companies were surveyed, including AXA, Allianz and P&V. They represent a representative sample to explore whether this topic already has support within the insurance community, and whether they are willing to offer a discount upon proof of responsible driving.
Are insurers today doing driving behavior analysis linked to an insurance premium?
With this survey we put the question "are insurers willing to allow a discount on insurance premium?" to the 9 insurers. Consequently, 8 out of 9 of the surveyed companies indicated that they were already aware of the proposal for a new car insurance formula based on driving behavior analysis calculated on the basis of driving behavior.
How do insurers stand on such premium?
Okay, so most are already aware that a possible new insurance formula is in the air. But how do they themselves feel about it? This is where the results immediately become very interesting. People had the choice of assigning a score from 1 - 5, with 1 being "very bad idea" and 5 being "very good idea. No one of the respondents here assigned a score lower than 4, which is still quite a nice result. 4 societies think it is a good idea, and as many as 5 think this discount is a very good idea.
Nice start to this survey, right? We probed further for the motivation behind their positive response. Among the responses were that if one were to look at the individual customer profile, the premium would be calculated in a much fairer way. Others then look at it as a reward to the customer for their safe driving behavior. Finally, 1 party also decides that this is also a way to also encourage young drivers to drive safely, instead of "punishing" them simply because they are young drivers.
So are they willing to grant this discount?
When asked whether they are effectively willing to grant this discount to drivers who agree to a driving behavior analysis, the answer was an unequivocal "yes. All 9 insurance companies are thus convinced that it is a good idea. A result we certainly could not have predicted beforehand, but it proves that there is work to be done to further develop and implement this train of thought.
Does the voluntary installation of an alcohol lock* have an effect?
Interesting to also investigate, was whether or not having an alcohol lock voluntarily installed would have an effect on how willing insurers are to grant this discount. Interestingly, here only 2 in 9 are willing to grant a discount if the customer would voluntarily choose to do so.
* An alcohol lock is a device placed in a vehicle, connected to the starter motor. Before the driver can start the car, he must take a breathalyzer test. If the alcohol content measured here is too high, the car will not start.
Time for action!
This research proves to us that the insurance industry is certainly open to commercializing auto insurance linked to driver behavior analysis. It is now up to them to continue this conversation internally. We look forward to the future with interest and, in the meantime, continue to work for safe traffic with responsible drivers. A rather small number would be inclined to revise this premium if drivers were to voluntarily have an alcolock installed.
The insurers, by all accounts, are already in favor. But where exactly do consumers stand on this, since they must also be willing to have a system installed in their car? We've written a second blog about that, where we take a closer look at the survey results for consumers!
Connect with us!
Do you have questions about how driving style analysis works, or are you interested in a system that can help you with this? Then don't hesitate to contact us without obligation using the form below. We will contact you as soon as possible to discuss the possibilities.
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