INSURER TO PUBLISH 250 MILLION MILE REPORT WHICH COULD CHANGE THE WAY CARS ARE INSURED.

COVERBOX

CAR INSURANCE TELEMATICS

PRESS RELEASE

March 2, 2012.

INSURER TO PUBLISH 250 MILLION MILE REPORT WHICH COULD CHANGE THE WAY CARS ARE INSURED.

A report on the analysis of more four billion fields of data collected from 250 million miles of vehicle journeys looks set to change the way car insurance premiums are set.

Insurance pioneer Johan van der Merwe, who acquired telematics-based pay-as-you-drive insurer Coverbox earlier in 2012, commissioned the report which has assessed the behaviour of tens of thousands of drivers since 2009.

It will be presented to a select panel of leading insurance companies in March.  Telematics records the movement of vehicles for analysis – including acceleration, braking, cornering as well as routes and parking location and other parameters - via GPS.

"What it reveals is that there's an overwhelming case for changing the way the insurance industry sets premiums: we can record, analyse and compare driving behaviour as against applying insurance 'proxy ratings' - we get factual driving information, and base rates on driving style and location rather than lifestyle and home address," said Mr Van der Merwe.

"Addresses are relevant to theft - massively less-likely with modern vehicle security - whereas driving style is relevant to injury or death, which obviously command much higher compensation payments.

"A low mileage car 'living' in a proxy rating high-risk area may rarely move, and may even be driven very carefully, but a high mileage car whose owner lives in a proxy rating low-risk area may actually be driven very aggressively through many rush-hour accident black spots, or in dangerous 'super-peak' periods.

"The report illustrates that both insurers and drivers will be better off if insurance is rated on driving style rather than lifestyle, and that good drivers don't suffer from the behaviour of bad drivers.

"The beauty is the speed with which the system could be introduced."

Coverbox pay-as-you-drive insurance allows drivers to take out comprehensive cover paid for by the mile, with the price per mile varying according to the time of the day or night: off-peak, peak or "super-peak" times.

All Coverbox policyholders have a personal website enabling them to see precisely how many miles they are driving, and what the cost is. The technology behind Coverbox is based on proven equipment and technology.

Ends

Further information:

Iain Macauley
im@pressrelations.co.uk
@Press_Relations
07788 978800

CAR INSURANCE: DITCH POSTCODE-BASED PREMIUM-SETTING, USE 17TH CENTURY SHIPPING RISK ASSESSMENT

COVERBOX

CAR INSURANCE TELEMATICS

PRESS RELEASE

February 23, 2012.

CAR INSURANCE: DITCH POSTCODE-BASED PREMIUM-SETTING, USE 17^TH CENTURY SHIPPING RISK ASSESSMENT.

Car insurance premium-setting-by-postcode should be ditched and replaced by a rating process based on a system of risk assessment developed for 17^th century shipping.

That’s the view of insurance pioneer Johan van der Merwe who says that advanced but established 2012 telematics technology would produce far more representative insurance premiums based on where and how a car is driven rather than socio-economic factors relating to the owner’s home address.

Mr Van der Merwe and a group of fellow investors acquired UK pay-as-you-drive car insurer Coverbox earlier in 2012, and with it they acquired telematics technology which monitors the time, place and manner in which a car is driven, all of which he says are more significant in calculating insurance premiums than where the car owner’s home is.

“Theft of a vehicle from its owner’s home is a minor consideration for insurers when compared with the third party injury consequence of an accident. The cost of compensation for injury after even a relatively minor accident can be huge, and increases pro-rata with the number of occupants of vehicles involved,” said Johan van der Merwe.

“Currently premium and risk calculations are worked backwards from claims rather than forward from actual risk.  Claims are themselves flawed and as such not an accurate measurement of risk.

“But insurance premiums are rated on the home postcode of the car owner or user, and that car can often spend only a part of the day or night there, with a comparatively low theft risk.

“The remainder of the day it is driven through the rush hour, or on a school run, or on a shopping trip, and then parked in a location which may be more or less risky than the home location.

“But there is more danger of an accident in an urban rush hour than a motorway rush hour, more danger of accident if driving overnight or through an accident black spot and so on. So somebody who lives in a high-risk postcode but parks their car for most of the day in a low risk area is perhaps being charged too high a premium, while somebody who lives in a low-risk area and drives through accident black spots in the rush hour is being charged too low a premium.

“This is where 17^th century insurance risk assessment comes in, when underwriters sat in dockside coffee houses and assessed the risk value of each and every ship leaving the port according to cargo, route, season, state of repair of the ship and level of experience of the captain.

“Telematics – on-board measurement, movement, location and systems monitoring and recording – track the vehicle, how and where it is being driven, and provide us with information which enables us to accurately assess the insurance risk of that specific car based on route and driving behaviour.

“The system will generate the technological version of a wince if the car is being driven through an accident black spot at peak time, but be far more relaxed if the route and time of travel is less risky. That will be reflected in an according premium adjustment, and, because the driver can go online and see what the system thinks about driving behaviour or location, may even cause him or her to alter their driving standards or routes they travel. That obviously has massive potential for bringing down, for instance, young drivers’ insurance costs by changing their behaviour.”

Coverbox pay-as-you-drive insurance allows drivers to take out comprehensive cover paid for by the mile, with the price per mile varying according to the time of the day or night: off-peak, peak or “super-peak” times.

All Coverbox policyholders have a personal website enabling them to see precisely how many miles they are driving, and what the cost is. The technology behind Coverbox is based on proven equipment and technology.

Ends

Further information:

Iain Macauley

im@pressrelations.co.uk

@Press_Relations

07788 978800

NEW COVERBOX PAY-AS-YOU-DRIVE OWNERS TAKE INSURANCE BACK 350 YEARS.

PAY AS YOU DRIVE INSURANCE

PRESS RELEASE

January 23, 2012.

NEW COVERBOX PAY-AS-YOU-DRIVE OWNERS TAKE INSURANCE BACK 350 YEARS.

Pay-as-you-drive car insurer Coverbox has been acquired by new owners - and the new business looks set to take insurance back to the 17^th century.

The new owners – one of whom established Budget Insurance, one of the UK’s most successful intermediaries with more than two million customers – plan to grow the current proposition user base, as well as introduce new insurance rating and charging processes aimed at driving pricing efficiencies, and moving away from the traditional “one price fits each demographic” model.

Coverbox Limited – which has 15,000 customers - will have new offices in Billingham and Peterborough in addition to its current Portsmouth presence, but the nature and structure of the business means there will be no changes to headcount.

Managing Director Johan van der Merwe said: “Coverbox is a telematics-based insurer – we basically monitor and assess the driving behaviour of the vehicle user via on-board technology which enables us to provide a much more accurate rate, and a very specific understanding of risk.

“The amount of information we gather from devices installed in customers’ vehicles – time and location of journeys, driver behaviour during those journeys and so on – means that we are in a position to develop much more bespoke insurance products, personalised to specific drivers.

“It also means we can reward well-behaved drivers – for instance, we all know young drivers who are maniacs behind the wheel, but we also all know young drivers who are incredibly safe and sensible behind the wheel. But the current insurance market lumps them all together as being equally high liability. We can change that.

“In many ways, the latest and developing technology in vehicle insurance actually allows us to go back to the earliest days of insurance, when underwriters sat in dockside coffee houses in the 17^th century and assessed the risk value of each and every ship leaving the port according to cargo, route, season, state of repair of the ship and level of experience of the captain.

“Even just a few years ago, people were wary – and a little scared – of the amount of ‘Big Brother’ information gathered about them, but the younger generations in particular recognise the benefits of person-specific information gathering, and are largely unworried by how their lives are monitored.

“As attitudes change from resistance to change to demand for change, the opportunity for the insurance industry to drive efficiencies, gain trust and develop new products grows.”

Coverbox Limited acquired the Coverbox business asset from technology company Wunelli.

Coverbox pay-as-you-drive insurance allows drivers to take out comprehensive cover paid for by the mile, with the price per mile varying according to the time of the day or night: off-peak, peak or “super-peak” times.

All Coverbox policyholders get free theft tracking – a £200 premium on top of a traditional insurance policy – and have a personal website enabling them to see precisely how many miles they are driving, and what the cost is. The technology behind Coverbox is based on proven equipment specified by several major car makers.

Ends

Iain Macauley

07788 978800

im@pressrelations.co.uk

www.coverbox.co.uk