We follow industry news closely here at Riskheads and when we heard that Insure the Box had picked up a best performer award for their telematics offering in 2013 we wanted to know what made them special. We’re pleased to report that they have developed a highly innovative product offering in the car insurance market using telematics as the foundation.
We looked at an application from Aviva last year that takes telematics and allows you to play with it to get a discount (if you drive well enough during the trial) on your car insurance. We really like the idea back then but we’ve thought about it and one of the problems is the potential for another driver to take the car out to give better results. The other problem is that the discount is based on a brief snapshot of someone’s driving performance rather than their ongoing road usage.
So how is Insure the Box different?
The company sells its products to relatively low mileage users. There are 6,000, 8,000 and 10,000 mile policies available. The purchaser agrees to have a telematics box installed in the car and this offers the advantage that if the car is stolen it’s easy to trace. It also allows Insure the Box to gauge the ongoing driving habits of the driver. There’s no charge for the device to be fitted to the policy holder’s car.
If the driver performs well and keeps risky activities to a minimum – they’re rewarded with additional miles of coverage at renewal. There are no penalties for bad driving. That’s a very clever retention model as it ensures that good drivers are financially incentivized for staying with the company each year.
That’s Not All
Insure the Box have also worked out a way of incentivizing all their customers regardless of their driving habits. They’ve teamed up with online sales teams for a range of other products. Every time an Insure the Box user spends more than 100 GBP with one of these partners – they earn reward miles for discounts off of policies too. It works very much like a club card from a supermarket.
Importantly there’s a threshold for the number of miles which can be discounted each year but the miles are never lost because the user can roll them over for the next year.
A Marriage of Technology and Marketing Savvy
Insure the Box’s model is a clever one indeed. The company has taken a technological advancement and teamed it up with smart marketing to deliver a solution which has been demonstrated to save policyholder’s money without compromising coverage. It will be interesting to see how competition in this and other spaces, which can benefit from technology, hots up in 2014.