An economically profitable Pay-As-You-Drive
Tuesday, 24 June 2008

In France, the economic interest in PAYD is far from being obvious, considering the specificity of the  automobile market.  "The average premiums being weak -along the lines of 400 euro per year- the possibilities are not the same as in Austria, Italy or the United Kingdom where the costs are 2 to 2.5 times higher" estimated Laurent Tollié, CEO of Covéa Tech.

In UK,  according to a BBC report, Norwich Union has suspended its mileage-based insurance scheme less than two years after it was launched.

Strategy Analytics analyst, Clare Hughes, said that prohibitive launch costs, privacy violations, back-office data integration and difficulties in measuring costs versus benefits would inhibit the immediate widespread launch of PAYD schemes.

 

The usage of PriPAYD e-bonus presents numerous economic advantages compared with "classic" PAYD :

  • The simple fact of aggregating the raw data and sending it without storing it reduces drastically the price of telecommunication . Using ebonus, a few SMS per month is little compared to the "GSM-DATA" subscription which was a costly but necessary side of Classic PAYD.  The costs of data storage are reduced as well.
  •  But the savings don’t stop there.  The fact of using a Personal GPS Navigator (PND or smartphone) and adding a plug-in "e-bonus" software module avoids, in a simple way, supplemental investment in a GPS device dedicated specifically to PAYD.
  • Finally this aggregation of data inside the vehicle protects the privacy of the user. The escrow service or "third-party aggregator" now becomes unnecessary (By the same method, we also avoid reproducing the misadventure of Norwich Union Life which was fined 1.26 million Pounds Sterling for not having sufficiently protected the data of its clients).

 

PriPAYD and its protection of individual civil liberties is preparing to revolutionize insurance,
but it will probably also open numerous markets to the GPS manufacturers,
which will find a specialized distribution network among insurance companies.

 

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