Comment: Understanding the risks

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With this so apparent, why then are the majority of automotive insurance companies becoming so animated about the proposed ban on age-based policy pricing and failing to prepare for the future, or even acknowledge the need to?

Basing pricing on actual driving behaviour using insurance telematics is widely acknowledged as the ‘way the world is going’ by forward-looking insurers, and their early preparation is leaving their competitors behind.

But if insurance telematics is the Holy Grail, insurers need to appreciate that unless they are logging each of their customers’ driving at one-second intervals, they are simply not capturing enough data to understand true driving style. And even just having this data is not enough to put insurers ahead of the curve – indeed the sheer amount of data can be overwhelming.

Instead, it must be combined with an ability to translate that data into value to appreciate how each individual is performing in their vehicle – and this includes a requirement to map activity to the underlying road network and even to the view of a respected expert, such as the Royal Society for the Prevention of Accidents, as to what constitutes ‘good’ or ‘bad’ driving.

Until the data is available and analysed in the context of the appropriate geography and accepted best practice, car insurance companies cannot possibly understand the risk presented by individual drivers.

Linden Holliday
CEO, My Drive Solutions