Aviva explains about "Pay As You Drive" insurance, which it has been marketing in the UK for over a year now. In France, flat charges based on mileage already enable low mileage drivers (less than 15,000 km a year) to reduce their insurance premiums.
Aviva explains about "Pay As You Drive" insurance, which it has been marketing in the UK for over a year now. In France, flat charges based on mileage already enable low mileage drivers (less than 15,000 km a year) to reduce their insurance premiums. The next and final stage in personalising the policy is "Pay As You Drive" insurance, which is about to be launched in France. The rate for this type of cover is based on mileage and the types of journeys made by insureds with their vehicle. Since 2005 there has been a problem with insurers gathering personal data (speed, location, journeys, etc.), which is considered as an infringement of individual freedom by the French Data Protection Authority (CNIL). A solution is being developed to bring the scheme into line with French legislation.
Drawing on its experience in the UK, Aviva will soon be offering its "Pay As You Drive" insurance in France. On the other side of the Channel, Aviva has found that there are two advantages of "Pay As You Drive" for insureds under this scheme:
- An average reduction of 30% on their insurance premium
- And a 20% fall in the number of road accidents for this group of insureds.
The situation in France
Flat charges based on mileage as a forerunner to "Pay As You Drive" insurance
As the final stage before "Pay As You Drive" on the way to the personalisation of policies for low mileage drivers, two flat charges based on mileage are already marketed in France by Aviva:
- The flat charge for "less than 9,000 km a year" which enables the insurance premium to be reduced by 15% (for "personal use" and "personal/commuting use" and if the reduction coefficient is less than 0,801, except for microcars and motor-homes)
- The flat rate for "less than 15,000 km a year" which enables owners of diesel vehicles (except for microcars) to reduce their premiums by 5%.
Opposition from the CNIL
The CNIL rejected the first proposals for "Pay As You Drive" for two reasons:
- The holding of data on drivers' speeds, as insurers are not authorised to keep a record of offences.
- The disproportion between the means used and the end result. The CNIL considered it disproportionate to collect detailed data on the journeys of all insureds simply to reduce premiums.
The solution being developed in France
A solution is currently being devised to avoid transmitting detailed data on journeys and the driver's behaviour to the insurer. This involves a device administered by a third party which sends the insurer aggregate statistics on the journeys made by the driver. This means that the insurer does not have details of locations or speeds for the driver's journeys.
Aviva's experience in the UK
Aviva has succeeded in converting the British to "Pay As You Drive" insurance
"Pay As You Drive" insurance offers the same covers for the vehicle and the driver as a standard scheme with an annual premium. Only the tariffs and the technical device differ.
The scheme - This involves:
- The GPS device with an assistance button in case of accidents or breakdown
- Insurance of the vehicle when it is stationary and associated assistance services
- Insurance of the vehicle when it is in motion and associated assistance services.
Tariffs
- The GPS device is sold for a fixed price for all insureds.
- The amount of the premium includes:
- A fixed part for the insurance of the vehicle when it is stationary (a flat monthly rate based on the insured's profile)
- A variable part relating to the insurance of the vehicle when it is in motion (based on mileage).
Based on the information transmitted by the in-car GPS device, Aviva issues a monthly bill, similar to a mobile phone bill, showing the distance driven and the time driven on each type of road.
The cost per mile varies depending on the times (peak or off-peak) and the type of road (motorway, trunk road, urban road, etc), as can be seen from the table taken from Aviva's UK documentation.
Example of tariffs for the UK "Pay As You Drive" scheme:
- Fixed monthly premium: £11
- Variable premium depending on the following factors:
| Tariff (in pence per mile) | ||
| Peak | Off-peak | |
| Motorways | 0.57p | 0.41p |
| Dual carriageways | 0.97p | 0.53p |
| Single-lane roads with speed | 2.14p | 1.41p |
| Roads with speed limits of | 4.68 | 2.74p |
Technical device for capturing data on the insured's journeys
A GPS device is fitted in the car. It transmits three types of information to the insurer or to a third party partner via the mobile phone network:
- Journey times
- Types of road
- Distance driven.
By combining these three types of data, Aviva can draw up a clear, detailed bill.
Data protection
The UK device is designed to protect all personal data held by the insurer. So:
- The device is identified by a number and does not store any information on the driver or the car
- The transmission of data to the insurer via the mobile phone network is secure and does not allow the car or the driver to be identified.
- Only Aviva can link the data transmitted by the device to the information on the driver and his car. It does this when billing, for example.
In the UK, there were the same fears about the holding of personal data by insurers as in France. Once Aviva's "Pay As You Drive" insurance had been on the market for several months, most policyholders said that the savings made outweighed their concerns about the use of personal data.
The French system should be even more secure as the insurer will not have access to detailed data on journeys and the behaviour of drivers.
-ends-
Press contacts:
Aviva Assurances
Fanny Garel
Telephone: 01 76 62 79 67
E-mail: fanny_garel@aviva.fr
HDL Communication for Aviva Assurances
Alexandra Rigaud
Telephone: 01 58 65 20 17
E-mail: arigaud@hdlcom.com
-ends-
1 Bonus and malus are expressed as reduction and increase coefficients of between 0.5 and 3.5. The reduction/increase coefficient applies to the premium.
Notes to editors:
About Aviva
Aviva is the leading provider of life and pensions to Europe with substantial positions in other markets around the world, making it the world's fifth largest insurance group based on gross worldwide premiums at 31 December 2006. Aviva's principal business activities are life insurance and long-term savings, fund management and general insurance, with total sales of €56.7 billion and funds under management of €499 billion at 31 December 2007.
With more than 150 years' experience in France, Aviva is among the top 10 players in the insurance market. Aviva France is distinguished by a balanced multidistribution model which has proved itself: 875 general agents, 1,800 agency staff, 400 life advisers, more than 1,000 brokers, partners (Union Financière de France and Médéric). Aviva France's partners also include AFER, the leading association of savers in France, and the Crédit du Nord Group. Specialising in unit-linked products, Aviva is well-known for the performance of its long-term funds and its strong commitment to its customers through its Good advice approach. Aviva has more than 3,300 employees. As at 31 December 2007, Aviva France recorded a consolidated turnover of €6.5 billion, a consolidated operating profit of €338 million (based on intrinsic value - EEV/IFRS norms) and managed assets worth €74.2 billion.