Written by Ina Opperman
Gender cannot be used to determine vehicle insurance premiums in Europe anymore and it will probably not be long before the same judgment is made in South Africa. However, before that happens, South African insurers will have another way to determine individual vehicle insurance premiums: with the use of Ctrack Telematics, an intelligent solution for insurers to rate how, when, where and by whom a vehicle is driven.
Risk is currently measured by the insurance companies based on generic data that only shows an average risk per group, which means that everyone in a specific group pays the same premium, whether they are better divers or more risky drivers. Female drivers usually pay a smaller monthly premium than male drivers, because general statistics show that more male drivers are involved in accidents.
“The European Court of Justice ruled in March this year that it constitutes discrimination to take the gender of the insured individual into account as a risk factor, underlining the importance of defining risk in other, better ways. Ctrack Telematics is ready to step into this gap and provide a complete solution by not only providing the data for insurers to rate drivers, but to interpret the data as well to offer insurers a complete solution,” says Edwin Fichardt, managing director of Ctrack.
Vehicle insurers are not the only ones who will benefit from the Ctrack Telematics system. “Consumers can look forward to reduced premiums if they are safe drivers. We will help to create a culture of high-level social interaction between insurers and consumers where premiums are determined by insurers according to the way you drive your vehicle. In addition, your insurer can use your profile to warn you that you are becoming too much of a risk for it to insure you and give you time to correct your driving behaviour,” explains Fichardt.
Insurers should only determine risk based on distance, speed, time of day and driving attitude. Ctrack Telematics is a proactive way to ensure that drivers take care when they drive. There will be no more arguments about the main driver after an accident and insurance conditions can be relaxed for drivers with a good driving profile. According to Fichardt the system will also ensure social benefits such as less fuel usage, less accidents and therefore less road deaths.
The Ctrack Telematics device will indicate what the speed limit in every area is and indicate if the driver exceeded it. The accelerometer in the device will also indicate any swerving and harsh breaking. This will bring a reduction in fraud and theft with greater discernment into where, when, why and how accidents occur and insurers will be able to inform their customers on a regular basis how their driving behaviour is impacting on their premiums.
“We envisage that with our system, vehicle insurance will move away from being a grudge purchase, because premiums will become more fair based on actual driver behaviour,” Fichardt says.