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SECTION I FUNDAMENTALS OF THE UBI MARKET If State Farm is unable to retrieve the odometer reading from the vehicle health report, it removes the initial participation discount back to the effective date it was added. In 2015, State Farm started to offer a smartphone-based solution, Drive Safe & Save Mobile, the app version of the PAYD programme (in Ohio only). It is more flexible but not entirely friction-less: Licence • The driver must have a phone running Android version 4.3 or higher with Bluetooth Low Energy or an iPhone 4s or newer running iOS 8 or higher, agreement • Odometer readings must also be provided (through the app or through a State Farm agent at renewal, which can be every 6 months. A photo must also be taken of the odometer, signed by • Although full acceleration, braking, cornering and speed data is collected, only mileage is used for pricing. AAAA. Reserved Fig 1.11: State Farm’s new Drive Safe & Save Mobile PAYD programme for employees of BBBB Strictly reserved to BBBB Source: State Farm The app and tag functionality brings a number of advantages: employees. Distribution to third • Many drivers can be insured with the same car, as long as they all have the app. The app, connecting to the vehicle or the beacon will identify the car- vehicle for each journey, parties is prohibited • A driver can be insured for many cars on the same app as long as the set up is done with beacon and the app, © PTOLEMUS - www.ptolemus.com - Global Usage-based Insurance Study - January 2016 - All rights reserved Strictly reserved for the internal use of the reader - Distribution to third parties is prohibited 78
SECTION I FUNDAMENTALS OF THE UBI MARKET • If the driver changes car, the beacon can be reused in the other car, • Driving data can be stored in the phone and uploaded only when the phone is connected to Wi-Fi, meaning a data plan is not necessary. State Farm is one of the few top tier carriers in the US to use TSPs: for its In-Drive programme with Verizon Telematics and for its Ohio programme with the Bluetooth beacon, with Cambridge Mobile Telematics (CMT), the same partner it works with in Canada. Licence agreement In fact, for the Canadian market, the same app (and Apple Watch app) is used in their PHYD programme “telematics”. The fairness of Pay How You Drive (PHYD) signed by While it is possible to question the impact on privacy of PHYD, it is clear that actual behaviour-based insurance is a major improvement in the fairness of the insurance risk pooling system. AAAA. Reserved Discovery Insure, a South African personal insurance provider, has even coined the term of DQ ("Driver Quotient") in its commercial offering to show that the driver is ultimately in control of the premium he/she pays. for employees of BBBB Discovery launched one of the first comprehensive Pay How You Drive (PHYD) programme in 2011 called VitalityDrive. From the start, instead of a discount, the model was meant to reward safe behaviours. If the customer drives well, he/she will earn DQ Points based on his/her driving behaviour. The more points, the greater the reward. Strictly reserved to BBBB Originally based on a black box from cTrack, Discovery Insure kept innovating and is one the first insurers today to also offer a programme based on a smartphone app and a Bluetooth low energy beacon (tag) from Cambridge Mobile Telematics. employees. Distribution to third parties is prohibited To join VitalityDrive, the driver pays €4 per month, which gives the ability to earn up to €52 in fuel rewards each month. © PTOLEMUS - www.ptolemus.com - Global Usage-based Insurance Study - January 2016 - All rights reserved Strictly reserved for the internal use of the reader - Distribution to third parties is prohibited 79
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