Wed | Sep 26, 2018

BCIC tracking driving habits of motor policyholders

Published:Sunday | June 17, 2018 | 12:00 AMNeville Graham
Peter Levy, managing director of BCIC.
A BCIC centre in Kingston.
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British Caribbean Insurance Company (BCIC) is tracking the driving behaviour of auto insurance policyholders, with their consent.

Since late 2017, the company has been pilot-testing the Amber Connect vehicle-tracking device on privately owned motor vehicles and nearly 1,000 customers have been fitted so far, according to Managing Director Peter Levy. He is not saying how much money has been ploughed into the project, only that it represents a big spend for the company.

"It's not something I can talk about, but I can say that it ... is the biggest product-based investment we've ever made," Levy told the Financial Gleaner.

BCIC has been inviting new and renewing policyholders to a specific location, withheld at the company's request, for the two-hour installation of the tracker on their vehicles.

The Amber Connect application is also uploaded to the client's smartphone giving them access to various services: GPS vehicle tracker; vehicle recovery; check fuel analytics; storage of car documents and expiration reminders; tracking driving behaviour; antitheft vibration alerts; geo-fencing to alert the user when the vehicle goes outside preset boundaries; and remote shutdown, although this is not recommended for high-end vehicles from 2015 onwards such as Audi, Mercedes-Benz, BMW, Land Rover/Range Rover and Porsche.

"Everything that Amber offers with their units is included in the software package that comes with it. It is essentially the Amber product with BCIC branding," Levy said.

The tracking service is free to persons who sign up during the pilot, but representatives of BCIC are already quoting an annual fee of US$85 for persons who opt to continue the service beyond the test phases, or a special price of US$60 for persons who sign up immediately to start receiving the service a year from the initial-sign up.

Presently, the Amber Connect system retails for about $15,000 to $21,000. Clients who accept the offer will only have to think of a low maintenance package for the system in subsequent years.

"We offer the device and the installation included with your insurance premium. The only cost to the client is some of their time to allow for the installation. In terms of maintenance, the first year is included and then it's up to the customer to continue after year one," Levy said.

The Financial Gleaner pressed Levy on the fact that BCIC will have access to the information on the tracking device, which raises implications for privacy, but he insists access to the data would be beneficial to policyholders, citing as example a male driver under 25 years old.

"The way we price (premiums) now is by putting people into groups based on the characteristics that are highly correlated within that group so it shouldn't surprise you that, for example men below 25 will generally pay a higher premium than others, all things being equal," Levy said.

He says BCIC is trying to use the analytics to price the customer according to the risk that they represent by virtue of their behaviour on the road. Good drivers, he argued, stand to benefit.

"It is a way avoiding the lumping of people into groups, which they don't necessarily share the attributes of good or bad and having a more personalised pricing, which is determined by how much you drive, how many times you brake sharply, how smoothly you drive, and so on," Levy said.

Connection to the system is entirely voluntary according to Levy. He says BCIC is trying to use the analytics to price the customer according to the risk that they represent by virtue of their behaviour on the road. He insists that BCIC is not pushing customers in any particular direction.

"No not at all; we are not foisting it on customers, but we think that there is a segment of the customer base and prospective customers who would be attracted to it so it's totally optional," Levy said.

Installation of the Amber Connect system will place BCIC customers in the same league as drivers in many developed countries. Levy said BCIC had long wanted to join them but could not find a willing technology partner, because Jamaica was too small to be of interest to them.

Then the ICD Group, which is the parent company for BCIC, acquired a stake in Amber Connect just over a year ago. Levy says this was the catalyst for action.

"When Amber Connect became a related party, in that ICD took a position in that company, there was a lot of synthesis and the question was how we [would] find ways to work together," Levy said.

There is no word on how long the pilot phase will take. BCIC recently expanded the programme to clients who come through third parties. Each client who takes up the offer for the time being, however, will get one year free service.

Levy says that during the pilot phase, BCIC aims to gather enough data to draw reasonable conclusions about driving habits. The data will then be used to develop a reasonable pricing model for auto insurance "that is easy to apply and easy to understand", he said.

neville.graham@gleanerjm.com