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Mobile network operator (MNO) O2 has become the first mobile company in the UK to offer a car insurance product with the launch of O2 Drive, a service that uses the internet of things (IoT) technology to encourage responsible driving.
Built with assistance from Junction, the brand partnership arm of Peterborough-based insurance services provider BGL Group, the O2 Drive product will include an optional telematics proposition, called Box on Board, to monitor any driver behaviour that may positively or negatively affect premiums.
Drivers who choose to take the Box on Board product, which is fitted alongside their car battery, will get an up-front discount on their premium – O2 mobile customers will also get a discount – and give access to driving data and scores via an accompanying mobile app, along with tips to improve safer driving.
The app will also offer information on emergency breakdown assistance, policy details, advice on what to do and say in the event of an accident, and perks such as discounted repairs, MOTs and servicing, as well as access to the O2 Priority event ticketing service.
O2 said the service was pitched at young drivers between the ages of 17 and 24, who traditionally have been subject to higher insurance costs as they are at higher risk of crashing.
“Despite the rapid evolution of technology, the way we insure and service our cars has remained largely unchanged, with customers telling us that buying insurance is impersonal and confusing. We are on a mission to make customers’ lives easier through mobile, which is why we created O2 Drive,” said O2 director of digital, David Plumb.
“Based on the excellent feedback we’ve had so far for O2 Drive, the Box on Board proposition was created to further simplify the challenges of owning and driving a car safely. It unites our customer experience with our expertise in mobile to create a more personalised service, insuring people for who they are and rewarding them as they drive,” he said.
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“The customer is at the core of all of the products that we launch, including O2 Drive and O2 Drive – Box on Board,” said Junction MD Gary Duggan. “We will reward their loyalty to O2 with offers and services, and address the needs of individual customers, offering them an unprecedented level of service.”
The use of telematics, and by inference the IoT, in the vehicle insurance sector is rapidly gaining momentum since it enables insurers to run their processes more easily and efficiently in the event of a claim, and in theory to pass savings on to drivers.
Writing in Computer Weekly last year, Jonathan Hewett of Octo Telematics said that whereas insurers before had to price their policies on proxies and assumptions about drivers, regardless of their actual behaviour on the roads, the use of telematics now gave them additional insight into various factors, such as aggressive acceleration or braking, that indicate a propensity to bad driving.
Octo uses Software AG technology and its own analytics algorithms in its ‘black box’ technology to provide individualised risk assessment and crash analytics to over four million active drivers around the world. So far, it claims to have logged 100 billion miles of data on driving and analysed 250,000 crashes.
Elsewhere, satellite connectivity provider Viasat recently teamed up with Orange Business Services to build an IoT roaming network covering telematics solutions deployed in up to 350,000 vehicles.