Social Fleet Insurance?

JohanStrydom

Hi,

I'm a consultant helping insurance companies develop new innovative products. What would your views be on a Social Fleet Insurance product where you can invite your safe driving friends and earn discounts for being better than the average drivers out there? The idea is simple. On your own you get grouped with random people (for example 21 year old drivers living in London driving a Corsa) and insurers calculate an average premium for the group.

If you could invite the your friends you believe are safe drivers, as a safe driving group (Social Fleet), we could create a product where the following benefits might well be possible:
1) Discounts for all in the group. As a group you have more credibility for proving you are better drivers than arguing it on your own experience. Since you know better than the insurance companies who boy racers are, insurance fraudster, etc (behaviour which makes everyone's premiums go up) you can invite only safer and honest drivers (friends in your social circle) to become part of your Social Fleet. I believe discounts could be argued at around 3-5 vehicles sized fleets. If you can grow your Social Fleet to over 30 vehicles, most insurers will see it as a group credible to be different from other drivers in general.
2) Would this become more attractive if drivers within a Social Fleet are covered for no extra cost to drive each other's vehicles? This could be very attractive to say Family Social Fleets or friends needing a designated driver after a drink.
3) With telematics insurance becoming very popular (where a box in the car provides data on driving behaviour via online dashboard), it will be easy to spot and educate bad driving behaviour. Influencing a driver this way will be easier for a friend or family member than an insurer to do.
4) In post code areas where insurers charge lots more for insurance because of the experience in the area, this could be a way for well behaving drivers to pay a decent premium rather than subsidising their bad behaving neighbours. Similarly well behaving young drivers grouping up together could do the same.

What do you think? Any ideas or comments welcome!
Johan

InsideInsurance

Strangest way of doing NPD/ market research I've ever seen!!

The opening paragraph doesnt make sense. Either your an individual and as an individual you enter the insurers common pool or your a group of people on a fleet policy and together you enter the common pool which could still just as easily contain boy racers, hell it could even contain a whole group of them!

1) Just because a group presents itself doesnt mean they are safe drivers. You can easily have a pool of boy racers presenting themselves. Plus how many people actually know how many SP30 or minor scrapes their friends and family have - blood being thicker than water they would arguably more likely accept the argument they were unlucky in that accident were as you'd say a stranger was a bad driver

2) Are you talking about normal DOC where you only get TPO cover or saying they will get comprehensive cover? If it is comp cover how do you deal with the family group which has teenagers with their 1.1 cars but also a couple of rich uncles with their £50,000+ porsche or range rovers? Insurer's wont want to pick that up. Limit to over 25s as normal fleet policies do then how do you deal with it when one of the rich uncles does want their kids to be able to drive his car? Is it just not suitable for this setup?

3) Since when were telematics getting more popular? Sounds more like a way of selling how to keep track of each other than anything to do with stopping bad habits.... can see the selling strap line.... think you have a cheating husband? buy XYZ Insurance and find out!

4) The reality is that averaging will happen and the problem with averaging is those that pay below average will leave as its not competitive and so then the insurer has to push the price up as the average of the pool has increased. A similar one to look at would be the likes of the £75,000 blanket home contents insurance which is instead rated on the number of bedrooms. A 1 bed flat probably has an average content of nearer £30,000 so the insurer actually rates on that assumption. Thus its too expensive for someone with £10,000 of contents and they go elsewhere.... you end up therefore with everyone having between £25,000 and £85,000 content so the average moves up to £40,000 and the insurer then has to rate on this.... then those who's content is £30,000 or under now find they're cheaper else where so they leave.... now the average content is £37,500..... the cycle goes on


There are far too many questions left outstanding, how does NCDs work? How do people join and leave groups? How do premiums work? Who pays what/ are they jointly liable? Is this going to be a telematics based policy? How do add ons like LE or Breakdown work?

raskazz

To the OP: Out of interest, have any insurers actually expressed an interest? Can't see many underwriters falling over each other for this sort of thing tbh.

mikey72

How much did you get paid to post on here?
Does your client know this is how you do the research?
Or do you just share the same name?

Johan Strydom
Head of Pricing (Consultant)

Current

Head of Pricing (Consultant) at Markerstudy Group
Director (The Actuarial Consultants - www.actuarialconsultants.co.uk) at Prime Resource Ltd

Past

Insurance Actuary at Government Actuary's Department
Contracting Pricing Actuary - Specialty lines at Beazley
Pricing Actuary - Contractor at Munich Re Health Devision
Actuary at Zurich Financial Services
Residential Actuarial Team (RAT) at Hazell Carr
Actuarial trainee at Friends Provident



To answer the question though, random strangers drive better than most people I know, and the whole point of insurance premium is to pay for the accidents of myself and others, so the premium should be shared between random strangers.

vaio

Probably not the same bloke, it’s a very common name and there must be dozens of Johan Strydoms who work as consultants in the insurance industry


Don't you just love the web (and google in particular)

mikey72

You'd hope he just pinched the name wouldn't you?

dacouch

A family fleet from Markstudy would be marginally better than a family fleet from Tradex although that is not saying much as Tradex are really really bad and Markstudy are just really bad

Imagine how pleased your "safe" driving friends would be when they have a claim on their social fleet and discover Markstudy's claim service, even worse if you had used their driving other cars extension for other members and written their car off and they had to deal with Markstudy

bouncydog1

Why are Tradex really bad? Are they bad at settling claims or what? They seem to do really well where I am located offering family fleet policies where young drivers earn their own NCB and their product is very competitively priced. They also appear to settle claims swiftly.

This may be because we live in a very small area and bad customer service would mean their book would reduce substantially but our own experience (to date) has been positive.

Interested to hear your comments.

raskazz

bouncyd!!! wrote: »

Why are Tradex really bad? Are they bad at settling claims or what? They seem to do really well where I am located offering family fleet policies where young drivers earn their own NCB and their product is very competitively priced. They also appear to settle claims swiftly.

This may be because we live in a very small area and bad customer service would mean their book would reduce substantially but our own experience (to date) has been positive.

Interested to hear your comments.

I think they reserve their very worst service for taxi drivers and motor traders.

dacouch

Truely awful Insurer, I've had some really bad problems with them, they genuinely go out of their way to find ways of not paying claims.

The fairly recent £13.5m claim from a young driver will have a long term effect on their underwriting of young drivers.

http://www.insurancetimes.co.uk/images/ITW_041208_16.pdf

bouncydog1

Fair enough - speak as you find - their policy towards young drivers after the court award last year has changed and is now, I believe, written as accommodation business.

Luckily our broker deals with any queries for us so I guess we don't see the poor service.