Norwich Union launch Pay as you Drive Insurance
You need to be aware that you may be refused the no claims discount if you've been insuring a fiat 500 that's been off the road for 5 years and then want to insure anything with value or performance. I never had a problem going from my rust-bucket vauxhall astra to a c230k but I think lesser/greater combinations may lead to tears!
portzy
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Thanks, but no thanks, springs to mind here. Again an administrative and technological monster is proposed to crack the shell of what is a very soft egg. Government Third Party?. Sorry, the only way would be 'up' for your yearly renewals to pay for the army of admin people. Bearing in mind Big Gord has promised to chop these, not add more. Tax increases as well anyone?. How would you shop around?, try shopping around for you Council Tax!
Who pays for the GPS?, you will at the moment but eventually it will be inbuilt so the cost of you new car will increase by......
Insurance companys will maybe, possibly, oh go on then because you are twisting our arms then, reduce their premiums in the first instance but before long......
Increase petrol/diesel prices?. Why should a private company get involved in collecting and passing on even more Government taxes, therefore incuring and passing on costs to drivers because of the need for more admin......
Just had an idea. If you dont insure your car we will fine you the equivalent of your premium. If you kill someone as well we will jail you too, for a very, very, long timel.
Just woke up. If you dont insure your car we will give you twenty hours community service. If you kill someone as well we will jail you for maybe a couple of months at worst, at best a four hundred pound fine.
OK, rant over, I could go on but I wont.
Portzy.
Who pays for the GPS?, you will at the moment but eventually it will be inbuilt so the cost of you new car will increase by......
Insurance companys will maybe, possibly, oh go on then because you are twisting our arms then, reduce their premiums in the first instance but before long......
Increase petrol/diesel prices?. Why should a private company get involved in collecting and passing on even more Government taxes, therefore incuring and passing on costs to drivers because of the need for more admin......
Just had an idea. If you dont insure your car we will fine you the equivalent of your premium. If you kill someone as well we will jail you too, for a very, very, long timel.
Just woke up. If you dont insure your car we will give you twenty hours community service. If you kill someone as well we will jail you for maybe a couple of months at worst, at best a four hundred pound fine.
OK, rant over, I could go on but I wont.
Portzy.
S.Minguijon
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The system "Pay as you drive" is only a tool. And as such it is susceptible of being used correctly or not, it only depends on the one who and how it is used.
It is certain that, so that this can be implanted in the market, it is necessary that it is profitable for the client, for the insurance company, for the Government, etc.
But it is also certain that at the moment the traffic has an enormous social cost in infrastructures, sanity, to cut lives short, etc. We are accustomed to cohabit with this reality and we no longer perceive their span. The system "Pay as you drive" is sufficiently powerfull as to influence positive and significantly in this terrible problem. And it seems obvious that this is compatible with the profitability of the project.
I have worked in this project during the last 15 years, I am the inventor of the patent that Norwich acquired, and I can verify that they are developing the project with an exquisite feeling of social responsibility.
I am still admired that Norwich doesn't make a simple and accelerated development to be able to capture the most profitable market segments, for example vehicles that are used less than 9000 km per year (they suppose 10% of the market). Instead of this, they undertook a development project of 3 or 4 years duration, with some impressive investments, with the objective of offering a solution integrated with other systems and compatible with the social necessities. It is necessary to keep in mind that it was (less and less) a project with an enormous risk.
We can congratulate ourselves (I personally feel very happy) that Norwich is leading this project. I can make sure that most of the insurance companies would only have kept in mind their short term own interests.
It is certain that, so that this can be implanted in the market, it is necessary that it is profitable for the client, for the insurance company, for the Government, etc.
But it is also certain that at the moment the traffic has an enormous social cost in infrastructures, sanity, to cut lives short, etc. We are accustomed to cohabit with this reality and we no longer perceive their span. The system "Pay as you drive" is sufficiently powerfull as to influence positive and significantly in this terrible problem. And it seems obvious that this is compatible with the profitability of the project.
I have worked in this project during the last 15 years, I am the inventor of the patent that Norwich acquired, and I can verify that they are developing the project with an exquisite feeling of social responsibility.
I am still admired that Norwich doesn't make a simple and accelerated development to be able to capture the most profitable market segments, for example vehicles that are used less than 9000 km per year (they suppose 10% of the market). Instead of this, they undertook a development project of 3 or 4 years duration, with some impressive investments, with the objective of offering a solution integrated with other systems and compatible with the social necessities. It is necessary to keep in mind that it was (less and less) a project with an enormous risk.
We can congratulate ourselves (I personally feel very happy) that Norwich is leading this project. I can make sure that most of the insurance companies would only have kept in mind their short term own interests.
Im sorry S.Minguijon but this kind of technology just seems to scare people(me included). The thought that we could be tracked by satalite wherever we drive, buy an insurance company, is scary!!!! Could they use the data they log to notice that you didn't obay the speed limit on a certain road at a certain time, thus loading your premium because your known as a habitual speeder??? And so on and on.
Stu
Stu
S.Minguijon
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Indeed.
What we ignore always produces us fear, it should be this way because it is a self-defense mechanism. It forces us to be cautious. In this concrete case to demand guarantees of the privacy of the information. Great part of the complexity of the project is due to be able to solve this aspect appropriately.
What we ignore always produces us fear, it should be this way because it is a self-defense mechanism. It forces us to be cautious. In this concrete case to demand guarantees of the privacy of the information. Great part of the complexity of the project is due to be able to solve this aspect appropriately.
Privacy my a*s
Never underestimate power of self delusion. This is 'invented' for one and one reason only. To hike the profit of insurance companies. No if's no but's. If anyone thinks that privacy is anywhere on the importance list ... well then I have a bridge in Brooklyn for sale.
Rant over.
S.Minguijon said:
Never underestimate power of self delusion. This is 'invented' for one and one reason only. To hike the profit of insurance companies. No if's no but's. If anyone thinks that privacy is anywhere on the importance list ... well then I have a bridge in Brooklyn for sale.
Rant over.
If the profits of the insurance company go up because more claims are declined due to fraud then I'm all for it. It'd be nice to think that the premiums would go down if the claims went down but of course this is unlikely to happen.league67 said:
S.Minguijon
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league67 said:
S.Minguijon
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Shude said:
Dear Schude, this it is exactly the key.
So that the project is viable it is necessary (although not enough) that is accepted by the market.
So that it is accepted by the market it is necessary (although not enough) that:
- Generate benefits.
- That these benefits are consequence of a decrease of the number of accidents.
- That these benefits are distributed among the insurance company, the client and the society.
If these aspects are not respected, the project is condemned to the failure (although neither they guarantee the success).
We know that the advertising campaigns of security, the penalizations and incentives and the formation have a very limited influence on the number of accidents..
The information (for example the road signs) and the own driver's capacity to evaluate the risk in each instant are the most important factors. There is a splendid study on this topic in urn:nbn:de:bsz:291-psydok-2206 although only in German language.
So the critical point is the quality of the information that the system offers to the driver so that the one can evaluate and to diminish its own risk.
Nowadays we can measure or to acquire the following data: speed, distances to the precedent vehicle, state of the pavement, intensity of the traffic, climatic conditions and visibility, abrupt swerves, occupants' number, security belts use, rest periods, driver experience, driver fatigue (reflections and coordination), revisions of the vehicle security systems, state of the tires and many more things... With this it should be possible to generate some good recommendations for the driver.
And in any way a policy based on this information will always be fairer than the basade in the sex, age, antiquity of the license, residence place and record of reclamations. I have always had the doubt of if this respect the Constitution.
S.Minguijon
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I believe that we can recover the discussion if we analyze the problems of a real application. A good example is the young drivers with poor experience.
It is a community with a very high risk. In normal situations their risk is low, but there are two very dangerous behaviours that are perfectly identified:
- When the one transports his friends, it uses the vehicle to impress them with his aggressiveness in the conduction. He is aware that his risk increases, but he doesn't value appropriately that he is responsible for what happens to his friends neither that the dynamics of the vehicle changes notably with the load.
- The drugs, alcohol etc, they diminish his perception of the risk drastically.
The frequent combination of both factors, multiplies its effects until disastrous limits.
Therefore, in this case we could detect the number of occupants, in the case not to travel alone to demand him a bigger wisdom in the conduction and to force him to make some ability test before starting the vehicle.
Once that have identified the risk correctly, we notice that it is no longer dependent of the driver's age. These situations could take place in mature drivers, although it is much more unlikely because these last ones are able to dominate better their emotions.
The measure of these parameters is expensive and complex, so we can try to make some simplification. We identify that this phenomenon takes place with more probability in young drivers, the non working days and in certain schedules. This is much easier of measuring, but we lose reliability in the information and due to it a part of the power to influence directly on the dangerous behaviours.
The more we simplify, using indirect parameters, the more we limit the possibility to influence in the risk.
The extreme case is when we only make more expensive the young driver's policy, like it happens at the present time, our possibility to influence in its behaviours is null.
It is a community with a very high risk. In normal situations their risk is low, but there are two very dangerous behaviours that are perfectly identified:
- When the one transports his friends, it uses the vehicle to impress them with his aggressiveness in the conduction. He is aware that his risk increases, but he doesn't value appropriately that he is responsible for what happens to his friends neither that the dynamics of the vehicle changes notably with the load.
- The drugs, alcohol etc, they diminish his perception of the risk drastically.
The frequent combination of both factors, multiplies its effects until disastrous limits.
Therefore, in this case we could detect the number of occupants, in the case not to travel alone to demand him a bigger wisdom in the conduction and to force him to make some ability test before starting the vehicle.
Once that have identified the risk correctly, we notice that it is no longer dependent of the driver's age. These situations could take place in mature drivers, although it is much more unlikely because these last ones are able to dominate better their emotions.
The measure of these parameters is expensive and complex, so we can try to make some simplification. We identify that this phenomenon takes place with more probability in young drivers, the non working days and in certain schedules. This is much easier of measuring, but we lose reliability in the information and due to it a part of the power to influence directly on the dangerous behaviours.
The more we simplify, using indirect parameters, the more we limit the possibility to influence in the risk.
The extreme case is when we only make more expensive the young driver's policy, like it happens at the present time, our possibility to influence in its behaviours is null.
S.Minguijon
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I will try to open the polemic again.
What can it happen to our conventional insurance if the system PAYD is successful?
It is obvious that the system PAYD has an additional cost of administration of the information.
We had commented previously that, in spite of this, this insurance can be profitable for the clients that are willing to take measures to reduce their risk.
But there is also another market, consistent in the clients that, with or without reason, they consider that their insurance is exorbitanly expensive.
It happens that the car insurance sector has the particularity that the clients can have information of all the offers of the insurance companies and, on the other hand, the insurance company has very little information about their clients. The insurance companies make an effort in estimating the risk in function of where they reside, age, sex, driving licence age, and similar things, but this generates some tremendous injustices. The system PAYD is interesting for these the clients that are, in fact, the most profitable for the insurance companies.
What can it happen if these clients hire the policy PAYD?
A tremendous distortion is generated in the market of the conventional insurance. For example, if 10% of the most profitable clients disappear of the market, the policy of the rest one would have to increase 7%. And this causes that the system PAYD is attractive for more and more clients, the system becomes unstable until the conventional insurance only remains attractiveness for some marginal markets with very defined characteristic, as for example taxis (their profession demands them to estimate and to reduce the risk permanently).
In conclusion, a moderate success of the system PAYD will make disappear the conventional insurance.
What can it happen to our conventional insurance if the system PAYD is successful?
It is obvious that the system PAYD has an additional cost of administration of the information.
We had commented previously that, in spite of this, this insurance can be profitable for the clients that are willing to take measures to reduce their risk.
But there is also another market, consistent in the clients that, with or without reason, they consider that their insurance is exorbitanly expensive.
It happens that the car insurance sector has the particularity that the clients can have information of all the offers of the insurance companies and, on the other hand, the insurance company has very little information about their clients. The insurance companies make an effort in estimating the risk in function of where they reside, age, sex, driving licence age, and similar things, but this generates some tremendous injustices. The system PAYD is interesting for these the clients that are, in fact, the most profitable for the insurance companies.
What can it happen if these clients hire the policy PAYD?
A tremendous distortion is generated in the market of the conventional insurance. For example, if 10% of the most profitable clients disappear of the market, the policy of the rest one would have to increase 7%. And this causes that the system PAYD is attractive for more and more clients, the system becomes unstable until the conventional insurance only remains attractiveness for some marginal markets with very defined characteristic, as for example taxis (their profession demands them to estimate and to reduce the risk permanently).
In conclusion, a moderate success of the system PAYD will make disappear the conventional insurance.
peterchurch
Active Member
S.Minguijon said:
Thats nice But a few years ago I was the systems administrator for a small nieche insurance firm. It was purchased by a vary large firm. one of the first things they did was come banging on my door demanding all the customer records so they could start badgering them for different types for insurance products that they offered but we did not! I pointed out that this was not legal as our privacy agreement promised that we would not pass on policy details to third parties
I was told to "shut up and do it.." or they would sack me and get someone without a spine to do it instead...I happily walked
The point is, it does not matter how nice and protected you think you are. There is always some short term gain to be made by scum willing to break soft laws... Anything that can compile data on an individual to this granularity is too powerful to be adopted. The end.
By the way most of the damming data that you would not want an insurance company to get in an accident is already stored in the car
like speed when the airbag deployed. Or if you had even got to the breaks before you hit the pedestrian... Insurance companies just dont use it in normal life...S.Minguijon
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Indeed it is a polemic, sensitive and very complex topic, because many information is bound to our well-being. The governments have worked a lot in the last times to regulate this, but they are not able to transmit us the trust that it is resolved. In fact only they have defined the responsibilities of people who handle information better.
I don't have information of how Norwich and IBM will solve this topic.
From a principle we detect that the main weakness of this project was the confidentiality of the information. Several solutions were studied to eliminate or minimize it.
The one that I liked consisted in that the information was processed in the own vehicle. The insurance company would receive only very limited information (we can imagine that was something like that as a taxi). Only in the event of accident and in some small samplings (necessary to carry out statistical studies) you would consent to detailed information.
This led many problems to avoid external manipulations in the equipment and it limited the possibilities of the system.
This was about ten years ago, I suppose that, during this time and knowing that it was the weak point of the project, they will have looked for better solutions.
I don't have information of how Norwich and IBM will solve this topic.
From a principle we detect that the main weakness of this project was the confidentiality of the information. Several solutions were studied to eliminate or minimize it.
The one that I liked consisted in that the information was processed in the own vehicle. The insurance company would receive only very limited information (we can imagine that was something like that as a taxi). Only in the event of accident and in some small samplings (necessary to carry out statistical studies) you would consent to detailed information.
This led many problems to avoid external manipulations in the equipment and it limited the possibilities of the system.
This was about ten years ago, I suppose that, during this time and knowing that it was the weak point of the project, they will have looked for better solutions.
peterchurch
Active Member
Hi,
I don't think the problem lies within the period of setting up systems like these, as there is close scrutiny of down side issues and everyone is drawn towards "privacy issues" and the other show stoppers that would stop the project from working... The problem comes when the system goes through Transition To Operations, and a new team take over as guardian to the data.
They are normally a different team within a different sub department with a whole reporting structure up to board level. over the months and years the data will start to degrade as something that is to be protected, to collected data that might harbour new opportunities...
For instance: "Wow this guy drives like his hair is on fire... ( we could sell him to a list of sportscar manufactures ) Then they can use the GPS data we collected on his daily journeys to plot the best places to place adverts for their cars...
By the way. If this guy phones us for critical illness or medical emergency cover... I would pass, He is gonna need serious medical assistance if he keeps driving like that ....
I don't think the problem lies within the period of setting up systems like these, as there is close scrutiny of down side issues and everyone is drawn towards "privacy issues" and the other show stoppers that would stop the project from working... The problem comes when the system goes through Transition To Operations, and a new team take over as guardian to the data.
They are normally a different team within a different sub department with a whole reporting structure up to board level. over the months and years the data will start to degrade as something that is to be protected, to collected data that might harbour new opportunities...
For instance: "Wow this guy drives like his hair is on fire... ( we could sell him to a list of sportscar manufactures ) Then they can use the GPS data we collected on his daily journeys to plot the best places to place adverts for their cars...
By the way. If this guy phones us for critical illness or medical emergency cover... I would pass, He is gonna need serious medical assistance if he keeps driving like that ....
S.Minguijon
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Your reflection is absolutely correct.
Some relating data to the traffic accidents (ONLY IN SPAIN) they can make us meditate a little more:
- 5.300 deaths, 25.000 serious injured, 125.000 minor injured in the year 2003. It seems like a war communiqué.
- 100.000 accidents with victims in the 2003. One every 5 minutes. While you read this it has happen another.
- 12.500.000 accident claims to the insurance companies in the 2002. One every 2,5 seconds.
- The cost of all this was 14.000.000 million Euros in 2002. To be able to compare, the cost of the whole public health in Spain in the 2002 was also 14.000.000 €.
- It is the main cause of death in people until 44 years old. No comments about this, unfortunately we have all suffered this at some time.
Please, could you read the data slowly again? Our brain has really problems to understand these huge quantities.
Any measure to try to limit this tragedy, will generate other type of problems.
Don't you find that we have to make an imagination and legislation effort and even, if was necessary, to lose something of privacy to solve this problem?
Some relating data to the traffic accidents (ONLY IN SPAIN) they can make us meditate a little more:
- 5.300 deaths, 25.000 serious injured, 125.000 minor injured in the year 2003. It seems like a war communiqué.
- 100.000 accidents with victims in the 2003. One every 5 minutes. While you read this it has happen another.
- 12.500.000 accident claims to the insurance companies in the 2002. One every 2,5 seconds.
- The cost of all this was 14.000.000 million Euros in 2002. To be able to compare, the cost of the whole public health in Spain in the 2002 was also 14.000.000 €.
- It is the main cause of death in people until 44 years old. No comments about this, unfortunately we have all suffered this at some time.
Please, could you read the data slowly again? Our brain has really problems to understand these huge quantities.
Any measure to try to limit this tragedy, will generate other type of problems.
Don't you find that we have to make an imagination and legislation effort and even, if was necessary, to lose something of privacy to solve this problem?
peterchurch
Active Member
Hi,
I don't have the right to sell my childrens privacy to solve any problem. It isn't mine to sell/give away, and this is exactly what these forms of systems do. I would say that in life there are a minority of individuals that will never obey driving laws, and have total disregard for the safety of all around them. I also feel that there are a larger number of people that drive fast and do not pay heed to the real dangers of their actions. I think you would reduce road deaths and injury far quicker other methods...
1) Make pictures of the scenes of road traffic accidents available to the public. I would say that most drivers have no idea of the carnage involved in a real crash. I have whitessed two in my life and I would say that it has effected my driving far higher than a GPS device has. I used to have a GPS guidance system that recorded my trip for replay and showed milage. I was always aware that it could be used against me in an accident but It would not stop me from speeding, in conditions I saw as acceptable.
2) A colegue of mine was caught speeding and was sent on a police course to show the effects. He said that what he found out about himself scared him, and it has taken 10 - 20 miles an hour off his top speed and stopped him speeding in built up areas completely...
I think that like most things GPS data about your driving techniques would only slow people down for a few weeks, or until they forget the box is there, and then as their old habbits come back, they will just end up with higher premiums that they accept as par for the course...
But I do respect you for trying to find an answer to the problem
I don't have the right to sell my childrens privacy to solve any problem. It isn't mine to sell/give away, and this is exactly what these forms of systems do. I would say that in life there are a minority of individuals that will never obey driving laws, and have total disregard for the safety of all around them. I also feel that there are a larger number of people that drive fast and do not pay heed to the real dangers of their actions. I think you would reduce road deaths and injury far quicker other methods...
1) Make pictures of the scenes of road traffic accidents available to the public. I would say that most drivers have no idea of the carnage involved in a real crash. I have whitessed two in my life and I would say that it has effected my driving far higher than a GPS device has. I used to have a GPS guidance system that recorded my trip for replay and showed milage. I was always aware that it could be used against me in an accident but It would not stop me from speeding, in conditions I saw as acceptable.
2) A colegue of mine was caught speeding and was sent on a police course to show the effects. He said that what he found out about himself scared him, and it has taken 10 - 20 miles an hour off his top speed and stopped him speeding in built up areas completely...
I think that like most things GPS data about your driving techniques would only slow people down for a few weeks, or until they forget the box is there, and then as their old habbits come back, they will just end up with higher premiums that they accept as par for the course...
But I do respect you for trying to find an answer to the problem
S.Minguijon
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peterchurch said:
Dear Mr. Peterchurch:
The governments are making these and many more things and thanks to them the quantity of deaths has gone descending from 7.200 in 1989 to 5.300 in the year 2003, although the quantity of vehicles has been duplicated.
The formation to that you referred in the point 2, that is to say to force the dangerous drivers to study the causes and consequences of the accidents, it reduces the risk of this people by half and in a stable way in the time.
On the other hand, to have an accident, it doesn't have later repercussion in their risk. 80% of the accidents are caused by 20% of the drivers.
The posters with pictures, messages, etc, have influence during very little time term and they are only suitable for campaigns throughout the time of big traffic or dangerous climatic situations.
Regarding your comment on “selling” the privacy of the children, I felt obliged to reflect.
I have a daughter that will obtain the driving licence soon, it is very responsible and I trust her fully. In spite of it, I know that her behaviour will be modified when she is with her friends, because this is a human characteristic. I know that in many times I will be afraid, because there is objective data to be it.
I believe that I would hire a policy "PAYD" in the hope that helps her to avoid dangerous behaviours, although before I would find out very well that information acquires the insurance company and that guarantees offer that it is not used for other things.
From another point of view, I would feel very bad if she has a typical young people accident and I have rule out a policy "PAYD" without studying it seriously.
S.Minguijon
I'm new to this site and have caught up with the postings. I notice that you have claimed that Norwich Union have bought or use your original design/concept on PAYD. I am a little curious as your date of application is at least 4 years after the first concept was launched by Celtrak in Ireland with AXA as their underwriter. Indeed they have over 10,000 users in the same target market: being young men under 25 and fully using a GSM telematics solution. Not that I’m worried but NU appears to be making all sorts of claims when perhaps they we not the first but actually second or maybe the third into the market....... I hope no one challenges your invention as it would appear to be the start of things to come.
I also looked into the British Museum’s archive on PAYD. There was also Mercedes Benz doing the same with trucks in the late 80's with a Lloyds syndicate called Highway. The systems was used by Datatrak as an offering on the RAM data network for PAYD geo-coded mileage based invoicing for both the insurance and lease payments.
I'm new to this site and have caught up with the postings. I notice that you have claimed that Norwich Union have bought or use your original design/concept on PAYD. I am a little curious as your date of application is at least 4 years after the first concept was launched by Celtrak in Ireland with AXA as their underwriter. Indeed they have over 10,000 users in the same target market: being young men under 25 and fully using a GSM telematics solution. Not that I’m worried but NU appears to be making all sorts of claims when perhaps they we not the first but actually second or maybe the third into the market....... I hope no one challenges your invention as it would appear to be the start of things to come.
I also looked into the British Museum’s archive on PAYD. There was also Mercedes Benz doing the same with trucks in the late 80's with a Lloyds syndicate called Highway. The systems was used by Datatrak as an offering on the RAM data network for PAYD geo-coded mileage based invoicing for both the insurance and lease payments.
S.Minguijon
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Dear Imagine:
The insurance company Axa, concretely in Italy and Ireland, was the first company of the world that offered the insurance "Pay as you drive". However the company that really developed was Progressive Insurance, although surprisingly they have not marketed it yet.
If you have interest you can find information on this topic in http://terra.es/personal/smp00000/
The insurance company Axa, concretely in Italy and Ireland, was the first company of the world that offered the insurance "Pay as you drive". However the company that really developed was Progressive Insurance, although surprisingly they have not marketed it yet.
If you have interest you can find information on this topic in http://terra.es/personal/smp00000/