MARKET leader NTUC Income is using technology to monitor driving behaviour and reward good drivers with discounts on motor insurance premiums.
In a novel move, it is applying this telematics-based insurance system to passenger cars in Singapore; such a system is already common in Europe, and some Singapore commercial-vehicle owners also rely on it to monitor their fleets.
Income, the market leader with a 20.5 per cent market share for passenger cars, on Thursday launched two insurance schemes based on the integrated use of telecommunications with information and communications technology. The schemes are the app-based Drive Master, and FlexiMileage, which uses an onboard diagnostics device.
Drive Master tracks speed, manoeuvres taken (such as hard acceleration and braking, for example), mileage and drive time. The app automatically records the trip information after a journey - including those across the Causeway - has ended and scores it.
Depending on the resulting score, the insured will enjoy a discount of between 5 and 20 per cent on top of the no-claim discount (NCD).
FlexiMileage, a separate product, does not measure behaviour - only distance. Mileage represents exposure to accidents, so owners of low-mileage cars receive a 35 per cent discount if the annual mileage on their vehicle is below 5,000 km, and 20 per cent if it is between 5,000 and 9,000 km. There is no discount for mileage above 9,000 km.
The average Income premium for a private car is now S$940.
Until now, insurance premiums were calculated using proxy factors such as type of car and the driver's gender, said Income chief executive Ken Ng.
"But this technology allows us to measure things we were not able to before," he added.
By combining telematics and data analytics, he said, Income is able to offer insurance which is behaviour and usage-based. This allows for tiered savings to reward good driving behaviour and low-mileage driving.
The app was written by a technology partner; Income declined to reveal the amount it invested in both the software and hardware for the two new products.
Asked about privacy issues, Income vice-president for motor insurance Bill O'Connell said it is a voluntary scheme to share data.
He added that in the event of traffic violations, Income is unlikely to be asked by the Traffic Police for the data, but if it is required to by law, it will comply.
With regards to the app's algorithm, Income said it will average out driving patterns to reflect "true behaviour". It is also clever enough to distinguish between travel in a car and a train. It can even "learn" the insured's driving style and discern whether he or she is a passenger and someone else is doing the driving.
But since it is not foolproof, the app allows the insured to "opt out" by cancelling a past trip.
"The app is smart enough to self-filter, but of course, it is not 100 per cent accurate," said an Income representative.
But what if the app detects bad driving behaviour? Does that mean that instead of a discount, the insured's premium will increase?
The Income representative replied with a laugh: "No, we will not penalise the driver."