July 20, 2016 by Canadian Underwriter
Six in ten motor insurance policyholders in the United Kingdom say that avoiding any type of mobile phone use should be a top factor used by insurers in offering lower premiums, according to a new survey.
The survey of 1,314 motor insurance policyholders over the age of 18 found that 60% think that avoiding any type of mobile phone use – including both text and calls – should be connected to lower premiums. The survey, conducted by LexisNexis Risk Solutions and its UK telematics business Wunelli, by Consumer Intelligence was undertaken to determine driver opinions on how motor insurance premiums should be calculated, LexisNexis Risk Solutions said in a press release on Monday.
The survey also found that 78% of motorists think that the price they pay for insurance should be linked to their driving behaviour. As well, 81% of motorists want their loyalty to insurers rewarded in cheaper insurance, compared to 58% who think multi-policy discounts are important.
The findings have been released following the U.K. 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 release said.
“The very basis of telematics insurance is to provide fairer premiums to motorists so that they are not paying for the poor behaviour of others and to incentivize safer driving behaviour,” said Selim Cavanagh, vice president of telematics for Wunelli. “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.”
Women would have the most to gain, as the percentage of male drivers who regularly use smartphones is nearly double that for female drivers, according to the release, adding that younger drivers (male and female) are “distracted by their smartphone more often.” Drivers who use a hand-held phone at the wheel almost double their risk of an accident, with associated hard braking increasing by three-quarters (75%), while those on hands-free increase their risk by a fifth, according to a Wunelli study conducted over an 18-month period on 4,357 drivers.
“To satisfy this demand for fairer pricing based on actual rather than predicted driving behaviour, the insurance sector needs to break down the barriers to telematics adoption,” Cavanagh said in the release. “It is one of the reasons why we have launched a 12-[volt] device that plugs into the cigarette lighter in the car and is paired with the policyholder’s smartphone. 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.”