Launching on 1 February 2022 and aimed at coach operators with fleets of more than 10 vehicles, businesses can ensure their insurance premiums are accurately tailored to vehicle usage patterns.
Customers will be required to share their historical telematics data relating to vehicle usage and mileage, on which an initial premium will be calculated. An in-vehicle telematics device will then monitor the movement or location of vehicle through a GPS system, providing pinpoint accuracy about vehicle mileage and use. Adjusted premiums will then be calculated based on actual usage.
Going forward, flexible telematics-based pricing could consider operating schedules and routes taken - looking at traffic density, exposure to accident hot spots and weather - and eventually individual driver behaviour.
Gallagher is the largest broker to the passenger transport sector and commercial partner to the Confederation of Passenger Transport (CPT), offering insurance and risk management solutions to coach operators of all sizes, and will be working exclusively with QBE, one of the largest providers of motor insurance to the passenger transport sector, and a member of the CPT.
Daniel King, Motor Portfolio Manager for London & Southeast, QBE, said: “This is a first step in the viability of a flexible, telematics-based pricing model for a part of the transport sector that has been hard hit by the pandemic. Although restrictions have lifted, it’s unlikely coach operators in the UK will revert to pre-pandemic mileage levels for quite some time. This is our way of continuing to support the sector. We also recognise that data from sources such as telematics will drive the way we price business and understand our exposure for years to come.
“QBE has been underwriting passenger transport vehicles for over 50 years and there is definitely scope for alternative pricing models. Data will play a central role in supplementing conventional pricing approaches with more flexible methods, but we need to find the right balance to ensure new solutions are straight-forward and actually respond to our customers’ needs.”
Phil White, Transportation Practice Leader, Gallagher, said: “Like many industries, the passenger transport sector has endured a challenging period since the start of the pandemic. Over the last two years, we’ve worked closely with clients to support them through these unprecedented times - from helping them to understand, identify and manage any changes to their risk exposure as a result of rapidly changing restrictions, and arranging insurance solutions accordingly.
“Our partnership with QBE marks a milestone in our support for clients in the sector - offering both flexibility and transparency when it comes to their insurance. This new product gives us the ability to collect real-time data to create accurate risk profiles for our coach customers.”