What’s next for insurance telematics? Putting prepaid cover for occasional drivers to the test.

IoT Blog | March, 2018
 

Martijn Maters

Martijn Maters,

Channel Manager BeNeLux and Nordics, Vodafone Automotive

In recent articles on telematics insurance and apps, we’ve looked at how the Internet of Things (IoT) is helping automotive insurers reduce risk, open up new revenue opportunities and increase operational efficiency. And the latest opportunity presenting itself is the occasional driver.

Not all drivers use their car every day or travel over 15,000km a year—just think about people that live in major cities or own a second car. These are people who typically drive just now and then. And while their insurance might take into account their lower mileage, they’re still often paying to cover distances they’re not driving. Telematics is now making it possible to offer this group a prepaid usage-based insurance (UBI) package that gives them a better deal—and gives insurers a new way to attract customers.

Trialing prepaid car insurance

The first company in the Netherlands to trial such a solution is Nationale-Nederlanden, the main brand of major Dutch insurance group NN. The company’s innovation lab, Sparklab, has been working with Vodafone, Clifford Electronics and Intrasurance to develop and pilot a new telematics service, Bundelz.

Bundelz is the first prepaid car insurance in the Netherlands. And the idea behind it is simple. Instead of paying a monthly insurance fee, customers prepay for insurance to cover 1,000km of driving. If that’s all they use within a year, that’s all they pay for. But they don’t have to worry about driving uninsured. The app gives policy holders a clear view of how many kilometres they can drive before they hit 1,000km. And when they get there, they’re automatically renewed for another 1,000km, so they’re always covered.

The technology behind the service

Vodafone Automotive, the Vodafone Group company committed to delivering telematics products and services to the automotive and insurance industry, provides the underlying OBD telematics device designed and manufactured in-house, data management and telematics service for Bundelz.

The local operating company, Vodafone Netherlands, is bringing its expertise of IoT and prepaid to the table—and it’s adding its local knowledge of sales and marketing. And when it comes to the logistics of the operation, Clifford, the national service provider of Vodafone Automotive, helps onboard customers and provides support through program and service management.

What next?

This is an innovative solution, so naturally NN wanted to understand how much interest there would be in the market. “During the first phase of the trial, we wanted to see if such a customer—the ‘now and then’ driver—exists,” explained Kokke van der Werf, Managing Director of Sparklab, when we asked for his thoughts on the scheme. “The results are promising, customers are very satisfied, they have seen that Bundelz offers them a fairer and more cost-effective solution.”

That’s why NN is now expanding the pilot to a group of 1,000 users. If this goes as well as expected, Bundelz will be launched by mid-2018. It should prove to be the ideal insurance product for drivers who cover no more than 100km a week, or 7,500km a year.

For more information about how insurance telematics can drive value for customers, insurers and manufacturers, read our whitepaper, Insurance telematics: The five stages of value.

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