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Aviva: Overcoming the “greatest challenge” for insurance telematics

TU catches up with Nigel Bartram, motor underwriting strategy manager at Aviva, to discuss the latest trends, challenges, and opportunities in the insurance telematics market

TU: What is your role and experience in the insurance telematics market?

NB: Aviva is the largest composite U.K. insurer and also has a strong presence in Europe, North America and the Far East. We are a leading motor insurer in both Personal and Commercial motor segments.

My current role is that of Motor Underwriting Strategy Manager and that involves working with the industry, outside organisations and internally on risk appetite, improving the customer journey, reducing fraud and of course looking for ways to improve the bottom line. I am also passionate about the need to improve driver education and road safety and am involved in various projects looking at how Aviva can influence the issues of young drivers, elderly drivers, winter driving and dispelling insurance “myths.”

I was involved in the market leading Pay as you Drive experiment in Norwich Union, which saw real benefits in using telemetry to try to change driving behaviours. Being high profile we had more than our fair share of negative media but am happy that that gave us a lasting legacy of being pioneers in the market and gave a more progressive feel to the brand. We did learn a great deal before we suspended the project and some of the learning is being used in our standard products today. 

TU: What partnerships are you currently forging in the Insurance space in Europe? Also, what industry milestone did you recently achieve or are working towards achieving?

NB: We have been talking to all the major telematics suppliers in Europe and are also interested in Vehicle Manufacturer programs in this respect.  

TU: Which trends will impact the emerging Insurance telematics industry the most in the coming years and why? Challenges and Opportunities?

NB: In the U.K. insurers are under pressure to reduce premiums, but in reality the industry is still in a loss-making situation, so to reduce prices significantly there has to be a reduction in the costs of injury claims and a reduction in fraud. The Gender directive will place more upward pressure on young driver rates, so alternatives need to be available.

High prices do give an opportunity to offer alternatives particularly to young drivers and low mileage users in high-risk postcodes; however, surveys still indicate that those consumers most likely to benefit from a telematics product are the least likely to want to be monitored despite the financial pressures. This is still the greatest challenge as this restricts the market to low volumes and so low cost solutions are needed.

With customers changing cars every four years on average and insurers every two years, there are already a lot of “dead” boxes in cars, often with the current owner being unaware they are there. 

Also at some point there will need to be a debate about what rights the customer has to the data gathered and is it transferable in some form. We need to find a way to reduce wastage.  Some vehicles could end up with a number of boxes being installed – not a help with battery drain etc.

TU: How do you differentiate your offerings from your competitors? What according to you is your Unique Selling Point ( USP)?

NB: With Motor insurance, price is the key to be competitive on the risks you want to write. USPs in this market are mainly confined to marketing initiatives as far as the consumer is aware; they have little interest in how the price is derived or in general the data used to get to that price.

The consumer also wants to input the minimum effort. For some, brand is important and the Aviva brand serves us well in that respect. We have recently launched our multi-vehicle platform, which allows households to insure their cars and vans on one policy, and this seems to be hitting the mark with consumers.

TU: What key topics or issues are you looking at discussing with the industry at the Insurance Telematics Europe 2012 event?

NB: I would like to accept that devices will become more commonplace and discuss transferability between vehicles and insurers, new owners being aware of fitment and use possibilities of the device. I would also like to touch on claims alerts potentially reducing costs.

TU: How important do you think this market will be for you and the telematics industry in 2012 and beyond? What do you foresee to be the most exciting?

NB: I do see more products being launched to give the consumer more choice, but as things stand I cannot see high volumes of customers moving to telemetry-based products. I would like to see more vehicle manufactures proving better connectivity outside of OBD ports built in aerial connections, conveniently sited USB ports or similar to aid transferability of devices.

 

 

 

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