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.

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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.

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Further information:

Iain Macauley

im@pressrelations.co.uk

@Press_Relations

07788 978800

YOUNG DRIVERS AT NIGHT: THE TECHNOLOGY IS IN PLACE TO MONITOR AND CONTROL THEM

PRESS RELEASE

COVERBOX.CO.UK

PAY-AS-YOU-DRIVE INSURANCE

September 21, 2010.

YOUNG DRIVERS AT NIGHT: THE TECHNOLOGY IS IN PLACE TO MONITOR AND CONTROL THEM.

www.coverbox.co.uk

The technology to monitor and potentially restrict young drivers’ late-night driving is already being used by parents.

Mums and dads of under-23s are using a pay-as-you-drive car insurance pre-set cost curfew to track and control the safety of their offspring when they’re driving at night.

Coverbox pay-as-you-drive insurance uses GPS technology to monitor the distance covered and times driven, plus speed and violent braking, and charges drivers by the mile for peak and off-peak use – but under-23s are automatically charged a higher “super-peak” rate after 11pm.

“The vehicle’s speed, any violent braking or acceleration, even whether seatbelts are being worn, wipers and lights being used and any number of other parameters can be monitored, more so in more modern cars, which are basically computers on wheels,” said a spokesperson for Coverbox.

“In many instances, parents simply do not have an insight as to how their son or daughter’s car is being driven, but we log a vast array of data – this was originally intended to enable us to assess driving style for future insurance quotes, but we can also use it to analyse the frequency and detail of near-misses and accidents.

“Parents often end up paying the insurance premium for their son or daughter’s car usage – but pay-as-you-go is not just likely to be cheaper than traditional insurance, but also gives parents the opportunity to control late night car usage when the roads are at their most dangerous for younger drivers.

“If under-23s use their own car, then driving between 11pm and 5am at weekends can be very expensive – we charge a super-peak rate because younger drives are statistically far more likely to be involved in an accident during those periods, and more than twice as likely to be involved in a fatal accident at weekends.

“This is despite traffic density being around 90% lower after 11pm than during the rush hour periods when most accidents involving the general population happen.

“But if they’re driving their parents’ car, and the insurance is with Coverbox, then parents can monitor the time of day or night their son or daughter is driving and the mileage they’ve covered and ensure they make a contribution to the cost.

“Believe me, the cost of 50 miles of pointless cruising around at up to 45p a mile between 11pm and 5am – depending upon the car, the driver and the location - soon gets their attention. They may feel indestructible, but they cannot predict the potentially lethal actions of others on the road at that time.”

Coverbox pay-as-you-drive (PAYD) insurance allows drivers to take out comprehensive cover that is 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.

Over-23s are charged according to rush hour (Mon to Fri 730am – 930am & 430pm to 600pm excluding public holidays) or off-peak use, but under-23s are also subject to a “super-peak” charging structure: Friday, Saturday and Sunday 1100pm to 500am, and public holidays 1100pm to 500am. However, under-23s will also receive a bonus of 200 free off-peak miles every three months if they stay claim and conviction free.

The technology behind Coverbox - provided by Cobra, one of Europe’s leading automotive security companies, and based on proven equipment specified as original equipment by several major car makers - means customers will also have the additional peace of mind of theft tracking: in virtually all cases, Coverbox can track and locate the car if it is stolen.

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Iain Macauley

07788 978800

im@pressrelations.co.uk www.coverbox.co.uk

Background:

Customers log on to www.coverbox.co.uk to apply for insurance, and receive a selection of quotes and varying features from Coverbox’ insurance company partners including The Co-operative, Allianz Insurance, Equity Red Star and Groupama Insurances. Insurance will ultimately be offered by six big insurance brand names, with the remaining two insurers to be confirmed shortly.

“The customers tell us how many miles they expect to drive, based on established driving habits and what times they tend to drive them, we then forecast how much - on a per-mile basis - their insurance will cost,” said Penny Searles. 

“We then fit the ‘Coverbox’ to their car which confirms the mileage they cover and the times they drive; it should take less than an hour to fit by technicians who travel to the customer – more than 100 fitters are in place around the country.

“Some months customers may do a little more mileage than planned and other months they may not; over the year it may well even out, but if they cover fewer miles than estimated then they can have a refund or we credit their insurance bill for the following year.

“In summary, it will work very much like a monthly utility bill – the key difference, though, is that low risk drivers who use their cars little and in off-peak periods are not penalised by the actions of or accidents suffered by higher risk drivers driving at higher risk times.

“We believe a significant number of Coverbox customers will save a great deal of money compared to the cost of ‘traditional’ car insurance premiums.”

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