Demonstrating a growing intolerance of mobile phone use at the wheel, a survey of 1314* motor insurance policyholders in the UK found that consumers want to be rewarded with lower premiums for not using their smartphones while driving.
The avoidance of any type of mobile phone use – including both text and calls – should be a top factor used by insurers in offering lower premiums, agreed 60 percent of those surveyed.
The survey, conducted by Consumer Intelligence for LexisNexis® Risk Solutions and its UK telematics business, Wunelli, was undertaken to determine driver opinions on how motor insurance premiums should be calculated.
Telematics policies enable insurers to detect whether a motorist is using a smartphone at the wheel, and the study revealed that the vast majority (78 percent) of motorists are comfortable with the fact insurers will use their driving behavior data sourced from a fixed device or smartphone app to determine the price they pay for their insurance.
The findings have been released following the UK government’s warnings to the insurance sector that traditional ways of rating motor insurance will become obsolete with the emergence of the connected car and driverless car.**
“The very basis of telematics insurance is to provide fairer premiums to motorists so that they are not paying for the poor behavior of others and to incentivize safer driving behavior,” said Selim Cavanagh, VP Telematics for Wunelli, a LexisNexis Risk Solutions company.
“From our research, the vast majority of motorists understand this but there is evidently a great opportunity for insurers and brokers to consider how they can tap into this growing level of awareness and the corresponding expectations motorists have over how they should be rewarded,” he added.
Women would have the most to gain from the use of telematics because the percentage of male drivers who regularly use smartphones is nearly double that for female drivers. Younger drivers, both male and female, are distracted by their smartphone more often, the survey found.
Drivers who use a phone at the wheel almost double their risk of an accident with associated hard braking increasing by three quarters (75 percent), while those using hands free cell phones increase their risk by a fifth, according to the finding of a separate study completed by Wunelli undertaken with the permission of Drivology, a UK based insurer that uses telematics to reward safe driving with lower premiums.***
Insurers who reward customers more for multiple policies rather than for loyalty could be missing an opportunity to retain customers as 81 percent of motorists want loyalty to be a factor in pricing compared to 58 percent who think multi-policy discounts are important, indicated the survey.
“To satisfy this demand for fairer pricing based on actual rather than predicted driving behavior, the insurance sector needs to break down the barriers to telematics adoption,” Cavanagh went on to say.
“It is one of the reasons why we have launched a 12v device that plugs into the cigarette lighter in the car and is paired with the policyholder’s smartphone,” he said.
“The device communicates over Bluetooth technology with the designated smartphone app to record driving behavior data. As well as insurance coverage, customers benefit from the charging capabilities of the device and crash reporting – compelling consumer benefits which will help take telematics from niche to mainstream adoption.”
* While the findings of the survey were released on July 14, the data was collected in July 2015.
** A UK government minister gave a speech in May about the ramifications of driverless cars on the motor insurance industry.
*** The driving behavior of 4357 Drivology customers (men and women) who drove more than 8.9 million kilometers (5.5 million miles) was analyzed over an 18-month period, beginning in October 2014.