People who don’t want a device in their car are probably also bad drivers. They therefore pay a higher premium.Insurance Company Director
We are talking about the black box in cars that records how and sometimes where you drive. Not everyone has to drive around with such a black box, however, those that do have an immediate advantage. This makes it clear that the current insurance discussion revolves around the use of behavioral data. This helps inform insurers about the relative risk a driver poses.
So, will we soon be paying our insurance policies with our privacy? How far do we let insurers have access to our daily patterns? Big data is also a key topic in the insurance industry. It opens doors, but also involves risks and touches on fundamental privacy principles.
What data are insurers interested in? And what is it used for?
Historically, insurers are actually big data users “avant la lettre”. They have a huge internal databases containing historical data. For example, the number and nature of claims or information that the insured themselves entrust to insurers. Moreover, this data is becoming ever finer and more precise. For example, the location of a car accident can be determined more accurately.
In addition to the so-called internal data, insurers increasingly have so-called external data. Open data from governments or universities about specific studies, but also more and more online data such as web browsing behaviour, internet searches, apps or data from social media.
At present, insurers use big data analysis primarily in the context of risk management and that is only on the basis of internal data. But “big data” analysis is also used in the context of profiling for direct marketing, determining risks and linked pricing and for example to estimate the cost of certain repairs.
For a long time, the risk was determined on the basis of statistical models. Big data analysis makes risk assessment and therefore pricing more and more precise. In the long term, premiums can even be fully individualised. Insurers will use big data analysis in the future for personalisation of insurance premiums, in the understanding that the principle of solidarity must remain the starting point of any insurance policy.
Specialised car insurance is already being offered for young people. If they install a black box in their car, they can get up to 50% off on their premium. In this way they can bring the price of their insurance to the level of a normal driver.Steven Mertens
As a result of this though, there is increasing concern about privacy. Now, the right on privacy remains respected, as everyone will have the choice to share data in exchange for certain benefits. If someone chooses not to do so, they can still get an insurance. The only sacrifice are the benefits and discounts. The European regulation, which entered into force in 2018, are clear. The data that you share as an individual is your property, and you can decide for yourself what happens to this data.
It is also possible to control driving behavior via certain applications.
Stimulating behavior that limits risks is not new. For example the bonus-malus system used by the insurers has been around for decades. Insurers see positive stimulation of good risk behavior as part of their assignment. Studies also show that more and more people are open to this if it gives them an advantage.
Fleet360 also believes in measuring, increasing awareness and adjusting driving behaviour. By doing this it is important to reward drivers who evolve positively. In this way it becomes a win-win situation, the driver takes advantage but also the company, for its part it will see the claims and claim cost decrease and it will meet its CSR obligation.
In addition to insurance reviews, Fleet360 also offers fully integrated prevention programs to its customers, including communication programs, a driver application app to help measure indicators and driving patterns (including the ability to drive EV) and e-learning modules for desktop training.
Technology is all around us, our smartphones, in vehicles and on our wrists. The impact of it all is inevitable. Suppliers will tailor their offering and reward good behaviour. So, as a driver you can embrace these changes and ultimately benefit from them. For example better driving whilst commuting or smarter mobility will enable you to benefit both financial and physically.Steven Mertens
Contact us for more information and a discussion on how we can tailor your safety and prevention program.