Aviva’s “Pay for How You Drive” Technology

by nickk on October 1, 2012

Aviva’s adoption of new technology is certainly laudable. The company is currently asking five thousand drivers to participate in a new kind of driving test. They want their potential clients to use a smartphone application to test the quality of their driving over a 200 mile period. The application is called “RateMyDrive” and for the trial (at least) it’s only available on the Android platform so Apple users are out of luck.

It's a lovely phone but is it really a substitute for a risk assessor? Aviva seem to think so.

This application is designed to measure and record variables regarding acceleration, braking, etc. It uses telemetry data from the onboard GPS and motion sensors in the phone to derive this. The program will then work through the data and generate a “quality score” as a final assessment of risk. The idea being that those drivers with high quality scores will receive discounts on their insured premiums.

So far so good right? Of course, this is going to appeal to motorists particularly as the offer means that while they might be able to knock 20% of their premiums, even if they do very badly on the test – they’ve been told that the premiums will not increase. So drivers don’t risk anything by participating in the test and because Aviva are using smartphones rather than specialist hardware to deliver the test – there’s no real hassle involved. Download the application and go.

The Fine Print

However, not everyone will be a winner under the scheme. Firstly, any motorist who is paying less than £200 a year won’t be able to save a penny. They’re already classified as low risk due to their no claims history, make and model of vehicle and driving experience.

Those paying less than £400 a year are also limited to a maximum 10% discount. Again this is because of the level of perceived risk they present. So in fact, it’s only those facing premiums of over £400 who might qualify for the headline rate of discount.

Everyone who participates does get a neat feedback report on their driving though and a personalized quote with discount if they qualify for it.

Aviva are pretty pleased with the way they’ve managed to eliminate standard telematics systems from the equation. They feel that the innovative use of smartphones and removal of hardware will make the software accessible to anyone. We certainly think that they are on to something. With smartphones likely to become the only mobile platform over the next decade – this kind of technology offers the chance for brokers to become ever more expert at assessing risk.

Or does it?

One thing we can’t figure out is how Aviva are going to ensure that the insured party is the one doing the driving for these tests. Essentially it’s a trust based exercise for higher risk drivers. They download the app, they do the driving, and then they get feedback and possibly a discount. But how will insurers ensure that they don’t have someone else, with a much higher standard of driving, take the 200 mile trial on their behalf instead?

Brokers should keep a close eye on the results of the trials and the long-term impact of this technology on the motoring insurance market before rushing out to participate in similar schemes. We’re sure that telemetry based systems are going to make a huge impact on risk assessment in the near future and this is a great step in the right direction.

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