Motorists want insurance discounts in return for not using their cellphone

(July 18, 2016) LONDON — Demonstrating a growing intolerance of mobile phone use at the wheel, a survey of 1,314 automobile insurance policyholders found that consumers want to be rewarded with lower premiums for not using their smartphone while driving. Sixty percent think avoiding any type of mobile phone use — including both text and calls — should be a top factor used by insurers in offering lower premiums.

The survey, conducted for LexisNexis Risk Solutions and its UK telematics business Wunelli, by Consumer Intelligence was undertaken to determine driver opinions on how insurance premiums should be calculated.

The findings have been released following the UK Government's warnings to the insurance sector that traditional ways of rating auto insurance will become obsolete with the emergence of the connected car and driverless car.

Selim Cavanagh, VP Telematics for Wunelli, a LexisNexis Risk Solutions company, said: "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 incentives safer driving behavior. 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. Also younger drivers (male and female) are distracted by their smartphone more often. Drivers who use a phone hand held 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 study.

Telematics policies enable insurers to detect whether a motorist is using a smartphone at the wheel and from the study, the vast majority (78%) 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.

Insurers who reward customers more for multiple policies rather than for loyalty could be missing an opportunity to retain customers as 81% of motorists want loyalty to be a factor in pricing compared to 58% who think multi policy discounts are important.

Selim Cavanagh added: "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. 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.

"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."