Insurers in South Africa aim to improve road safety through reward systems
Telematics provides insurance companies with a wealth of information about drivers. It can track your vehicle and pinpoint where you are. It collects information on how fast you’re driving, turning corners, braking, as well as what time of the day you drive. However, this information is never used against you, as a matter of fact it’s used to help you improve your safety and security and that of others on the road.
While it’s true that a telematics insurance company will profile clients on the basis of a driving risk index – rather than just sex, age and residence – the results may turn out to be very rewarding. Insurance companies never – or should never – use collected data to determine or influence the outcome of an insurance claim, but they can use this data to manage rewards programmes. And this alone should be enough to convince you to opt for a telematics system.
In fact, insurance companies are beginning to focus on the enormous potential of telematics to inspire safer driving and just like programmes encouraging you to eat healthily, exercise frequently and smoke less, insurance telematics can introduce a system of rewards for its clients.
Indeed, this is the strategy being adopted by a number of telematics insurers in South Africa, a country in which the fatality rate on the roads is almost twice the global average according to Towers Watson. The main factors are always the same: speeding, alcohol and distractions, with the cell phone at the top of the list.
While telematics can’t measure the alcohol level in your blood, it can determine where you stopped, at what time you left a given location and whether you were speeding or using your cell phone while driving. This data can be used to reward virtuous behaviour. In fact, this is a particularly interesting case in South Africa, where there already is a widespread use of anti-theft tracking devices and drivers are less concerned about privacy issues than in other countries.
According to a report entitled “Telematics in South Africa: driving change” (Towers Watson, July 2015), 60% of the South Africans who participated in a survey were either definitely or probably interested in insurance telematics. And this figure increased to 73%, if the insurer were to guarantee a fixed premium.
Roughly 10% to 15% of insured cars on South African roads are involved in a reportable accident each year. This compares to 8% to 12% in many European markets, such as the UK. Moreover, interest in telematics is markedly higher in South Africa than it is either in the United States or in the United Kingdom, according to the Towers Watson Report. Indeed, over two-thirds of the respondents understood the benefits of changing their driving behaviour.
The report indicated that 78% of the respondents claimed they would pay greater attention to speed limits, 68% declared they would drive more carefully, and 55% would keep a safer distance from the car ahead of them. Moreover, the report also found that South Africans are second only to Spaniards for their interest in smartphone applications that monitor driving.
The bottom line is that telematics insurance increases road safety and security. It pro-actively alerts drivers to imminent dangers or unsafe driving (speeding, hard braking, etc.). It provides anti-theft geo-localisation services, emergency alerts for breakdowns and accidents, and even preventive alerts for regular maintenance and askew engine or mechanical parameters. Now, it’s being transformed not only into an invaluable educational tool to improve driving styles and habits, but also as the basis for a system that not only provides lower premiums, but also further rewards for safe driving.
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