Our LexisNexis Risk Solutions analysis of over 10 million UK car journeys uncovered the extent to which driving habits altered in lockdown and they remain significantly changed with a third fewer journeys made in cars, over the period that lockdown eased.
Our data and analytics experts teamed up with Autosaint, part of the multi-award winning Fresh Insurance Services Group, to analyse 43 million miles driven from 10 March to 15 June 2020 (see graph below).
The analysis uncovered:
- There was an 85% fall in traffic on 29 March as hospital admissions peaked
- Distances driven fell 60% during the height of lockdown, rising to 65% between 5 April and April
- As lockdown eased with non-essential shops opening from the 15 June, traffic was still down by a third on average, compared to 2019
- During lockdown, road traffic at the weekends was the segment that saw the biggest fall, dropping by 70% to 80% compared to the same period in 2019.
As many people in office-based businesses successfully transitioned to home working, the analysis demonstrates how telematics data delivers the level of insight the market needs to understand how driving behaviour changed and may continue to remain altered as a consequence of the pandemic.
What has been really interesting is the change in risk for insurance providers as a direct consequence of COVID-19.
There has already been much discussion around motor insurance and how changes in travel patterns could drive demand for more personalised insurance. We can think of how the lower mileage overall has been combined with lower evening-time car use in particular, and higher instances of speeding, especially in rural areas. There is also the possibility of permanent changes in travel patterns (three out of five people said in a recent study said they would like to work from home more often than they did before the lockdown).
Several reports have showed growing interest in telematics and ‘pay as you go’, mileage-based, usage-based insurance (UBI) products for those who have been using their cars less.
For many consumers COVID 19 was a stark awakening that usage-based insurance could be a smart choice, with a fair and transparent pricing methodology.
In another recent study, 40% of UK motor insurance customers said they would be willing to consider usage-based insurance, nearly three times the number from a previous survey before the pandemic.
When it comes to telematics products, there is a realisation for some consumers that it’s not just about the discounts: the rating and pricing factors are fair. And there are other benefits with some products, such as coaching for safer driving and vehicle tracking for countering theft.
These trends will increase the value and need for vehicle centric data to the insurance sector.
Looking across the whole period, our conclusion is that the psychology of the whole country was, and continues to be reflected, in driving behaviour. In fact, when hospital admissions were at their highest, insurance customers stayed at home, respecting the lockdown. The insight Autosaint has gained from telematics has put the company in a far more powerful position to understand this changing risk and support customers as they slowly went back on the road.
At LexisNexis Risk Solutions we will continue to closely monitor these trends on behalf of our insurance clients to help understand if the sustained reduction in vehicle use is the new normal, or whether in fact car use in certain situations such as commuting will increase due to concern over using public transport.
If the significant reduction in vehicle use looks set to continue, the appetite for mileage-based insurance could be set for an increase. Our LexisNexis Risk Solutions study of consumer attitudes to telematics insurance showed there was pent up demand for mileage-based policies well before lockdown.
In our survey*, 78% of drivers said a flexible premium based on miles driven and driving style would be their main motivation for taking a telematics policy and 53% said that keeping track of the miles they have driven was an appealing aspect of telematics. This is consistent with the same study conducted in 2017**.
The appetite for mileage-based insurance has been evident since we first asked consumers about their attitudes more than three years ago, but the pandemic has heightened that demand. Those insurance providers already offering telematics are in a strong position to develop their propositions to meet this need.
Collecting mileage data direct from the vehicle’s odometer is the next phase in the delivery of more personalised motor insurance products. We are already creating the links with the automotive OEM sector to deliver this data direct into the insurance market in a usable and compliance-focused form. The pandemic is accelerating developments in vehicle-derived data for fairer, more flexible motor insurance, helping the market respond to the changes in consumer work and travel.
* Consumer Intelligence research conducted January 2020 of 520 motor insurance policyholders representative of the UK motoring population. LexisNexis Risk Solutions was not identified as sponsor of the research.
**Consumer Intelligence research conducted September 2017 of 3,025 motor insurance policyholders. Respondents were 50% males, 50% females and representative of the driving population across seven age groups and the standard social demographic groups. LexisNexis Risk Solutions was not identified as sponsor of the research.
LexisNexis Risk Solutions, part of RELX, is a global data technology and advanced analytics leader, with customers in over 100 countries worldwide.
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