Road Safety: An Insurer Perspective

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Road Safety An Insurer Perspective

• Briony Krikorian
• Association of British Insurers

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Natural allies

• Safety benefits of risk pricing reducing risk
  levels leads to lower premiums, and therefore
  insurance creates automatic incentive for
  customers to reduce risk
• Prevention is better than cure insurers seek to
  reduce frequency and size of claims
• ABI works with the Government to address problem
  areas

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The safety benefits of risk pricing

• Insurers can be most competitive if premium
  charged is adequate to cover the risk posed
• Insurers work with claims data and customers to
  identify risk
• Insurers develop more sophisticated methods of
  risk pricing and encourage risk reduction
• Prospect of lower premiums encourages consumers
  to reduce their risks where they can
• Safer behaviour of insureds means average
  premiums are often lower

4
The safety benefits of risk pricing

• Canada 3 provinces where risk pricing allowed,
  the chance of being involved in a fatal road
  crash is almost 20 lower than in the more
  heavily-regulated provinces

5
Reducing quantity of collisions

• Commercial insurer-provided driver training
  courses for professional drivers that can lead to
  lower premiums
• Personal
• - no claims discounts reward safe driving
• - discounts for completing Pass Plus scheme
• - telematics-based insurance

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Reducing quantity of collisions

• One in 20 vehicles on UK roads are thought to be
  driven uninsured
• ABI research revealed uninsured drivers more
  likely to be unsafe drivers
• ABI and Motor Insurers Bureau working closely
  with the Government to bring down the level of
  uninsured driving

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Reducing severity of collisions

• Industry seeks to minimise the severity of
  accidents through two main routes
• creating pressure to improve vehicle design so
  that fewer people get injured in road traffic
  accidents Thatcham research centre
• promoting best practice in treatment and
  rehabilitation for people injured in road traffic
  accidents

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Example Young drivers

• Insurers identified growing risk of young drivers
• 2005 ABI collected claims data on young and newly
  qualified drivers
• 2006 ABI policy paper identified specific risks
  young and newly qualified drivers pose

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Young drivers
Car drivers killed or seriously injured per 1,000
licence holders
Source ABI estimate derived from Department for
Transport accident statistics
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Risk factor - inexperience
Percentage of accidents where inexperience was a
contributory factor
Source Proportion of accidents between 1999-2003
that had a contributing factor. Department for
Transport, STATS19.
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Risk factor - speed
Percentage of accidents with excessive speed a
contributing factor
Source Department for Transport, STATS19
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Risk factor young passengers
Driver fatalities per 10 million trips for young
drivers
Source Chen, L.H., Baker, S.P., et al. arrying
passengers as a risk factor for accidents fatal
to 16- and 17-year-old drivers. Jama 283(12)
1578-82. Cited in BBC Teenage drivers die
showing off (March 2000). Based on 16 year-old
drivers in the US.
13
Risk factor driving at night
Casualties per hour (serious and fatal) per year
by age (2003)
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Insurer incentives to reduce risk

• Discounts for advanced training e.g. Pass Plus
  scheme
• Accelerated no-claims discounts
• Telematics products Pay-As-You-Drive and
  deterrent fee
• A2OM academy
• Young Marmalade initiative

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ABI proposals to Government

• 12-month minimum learning period
• Structured learning program e.g. in rain, on
  different roads
• Passenger restrictions
• Discourage night-time journeys

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Government response

• July Transport Select Committee report on novice
  drivers endorsed ABI proposals
• October Govt response promised to consider
  proposals

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Other road safety areas

• Older drivers Govt medical licensing
  consultation
• Motorcyclists Enhanced rider scheme
• Cross-border drivers policy paper in November