Innovation That Matters

Pay-as-you-go motor insurance

Mobility & Transport

Insurance payments to Norwich Union's Pay As You Drive are calculated based on how often, when and where customers use their vehicle. A new business idea with loads of mileage...

According to research, nine in ten people say they would prefer their motor insurance to reflect usage of their car and the type of trips they make – with the majority favouring ‘pay as you go’ systems similar to those offered by gas and electricity suppliers. Which is where Norwich Union’s Pay As You Drive comes in: the British insurance company will be able to collect real-time vehicle data using a ‘black box’ device installed in its customers’ vehicles. Insurance payments will be calculated based on how often, when and where customers use their vehicle. The black box measures vehicle usage and sends data directly to Norwich Union, using similar technology to that used by cell phones. Billing occurs monthly, and the technology will also include associated in-car services, such as emergency assistance and real-time route planning. In pilot stage at present, Norwich Union’s ‘Pay As You Drive’ insurance is now being used by 5,000 volunteers, and Norwich is looking to increase this to 6,500 due to high demand. Over the next 18 months the firm will be collecting data to produce a picture of their volunteers’ driving patterns – with information coming in at a rate of 12 million journey data items every day. Which leaves some time for other players to get their act together; after all, pay as you drive, as you eat, as you call, as you watch, as you listen, as you drink, as you read and so on somehow appeals to consumers increasingly relying on PLANNED SPONTANEITY. So even if you’re not in insurance, this idea may get you going…


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