UK mobile operator Vodafone has formed a “strategic alliance” with professional services company Towers Watson to “fast-track” the development of usage-based motor insurance offerings outside North America.
The companies have also confirmed that UK insurance company AIG Europe Limited, a part of international insurer AIG (New York, USA), has signed up to run a pilot.
By combining the operator’s telematics service – branded Vodafone Vehicle Connect – with Towers Watson’s so-called “DriveAbility” program, the companies hope to accelerate the rollout of competitively priced services.
The system works by gathering and analyzing details of driving behavior, such as adherence to speed limits or abrupt braking, and then adapting insurance premiums accordingly.
“From our experience of doing work for clients in the United States, we know that analyzing granular data allows a much deeper understanding of the context of driving behaviors, which gives a much greater understanding of the likelihood of claims,” said Duncan Anderson, the global head of pricing and product management at Towers Watson. “Indeed we have found that our scores can differentiate loss ratio by over a factor of 10 from the best 10% of business to the worst 10%.”
Vodafone (Newbury, UK) and Towers Watson (New York, USA) say they would also like to offer optional value-added services like automated emergency calls and stolen-vehicle tracking.
According to Vodafone, standardized services could be scaled up quickly because of the two companies’ international presence.
“With the global reach of Vodafone and Towers Watson, customers can enjoy a consistent delivery and support model throughout many countries,” said Erik Brenneis, the director of Vodafone’s M2M business.
Insurers and consumers have been showing increasing interest in telematics and usage-based services, with European gender regulation helping to boost early adoption.