Allianz Changing the PAYD Insurance Game
18 Mar 2010
Thanks to Meta Systems and its Octo Telematics subsidiary, the Italian market has become the de facto European proving ground for pay as-you-drive insurance products. Octo Telematics pioneered pay-as-you-drive insurance in Italy and elsewhere in southern Europe with a connectivity box capable of providing tracking and stolen vehicle recovery services.
As a result, it is no surprise that Allianz chose Italy for the launch of its Service Pack and Pay Per Use services more than a year ago. Many insurers in Italy provide PAYD products and services. By some estimates, as many as 800,000 drivers are enrolled in such programs.
Allianz has set itself apart from the existing competition in a number of significant respects, but it is similar in also making use of a Meta System supplied "black box." Both the Service Pack and Pay Per Use services from Allianz are enabled by this connectivity box.
Service Pack offers customers eCall, bCall, theft notification and vehicle tracking applications via the Meta Systems box. The service is 99 Euro/year and requires the free installation of the box on the vehicle by a network of professional installers. The customer surrenders the box when the service is terminated.
Allianz does not claim to offer stolen vehicle recovery, only theft notification. This notification is achieved through the use of an RF keyfob device, not unlike the way LoJack works in the U.S. If the vehicle is moved without the keyfob being on-board, the customer will be notified by Allianz representatives via the company's wholly-owned Mondiale Assistance call center subsidiary. Vehicle recovery is left to the public authorities after the customer notifies the police.
The Mondiale call center also support the bCall and eCall applications. Unlike the eCall services of competing insurance companies, the Allianz system provides for call center reception and processing of both eCalls and bCalls via an embedded SIM. Calls are activated manually via a single button or automatically in the event of a crash.
Competing insurance companies that offer eCall-like features typically set up the application with the customer's home or mobile phone number, with no connection to a call center. As a result, customers receiving these calls are responsible for seeking assistance for the driver. In this way, Allianz has put itself squarely in the eCall business for its Italian customers who choose Service Pack. Switzerland is expected to be the next market to be activated.
The Pay Per Use product is an add-on service for customers who have already chosen Service Pack. The Pay Per Use service is targeted at low mileage drivers who can achieve savings of as much as 25% on their premiums based solely on the amount of driving they do - ie. mileage.
Allianz is thought to be satisfied with the response thus far, though it has not been overwhelming. The 99 Euro/year price was introduced in 2009 as a promotional offer but remains more than a year later. The next steps for Allianz are to bring its solution to more European markets. The range of savings on the Pay Per Use product will vary based on demographic and geographic calculations.
The Allianz initiative shows a maturing in the PAYD market as location-aware insurance products begin to move into the mainstream. The Allianz offering is significant for its integration of eCall and bCall services along with theft notification all enabled via the customer's phone, though the theft notification is enabled by an embedded connection.
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