Rethinking automotive insurance

Cars are a lot “smarter” than they used to be. Today, even standard cars can apply the brakes if they sense an obstacle in their path, keep you from drifting into another lane and sound an alarm if you nod off behind the wheel.

New active safety features like these, combined with changes in how cars are used (such as ride-hailing apps and car-share programs) meant it was time to radically rethink automotive insurance. In 2016, Swiss Re began developing an auto insurance product that uses telematics — data on when, how, and under what conditions a car is used — to more accurately assess evolving risk and price policies accordingly.

The result, an app-based telematics product, went live under the trade name Coloride. Coloride uses Swiss Re’s white-labelled phone app to record trips and score customers automatically, as they drive during the week. This data is then combined with the driver’s historical claims data to calculate the final score, used then for pricing adjustment at the end of the year.

By taking on the cost of research and development, Swiss Re makes it possible for clients such as Netherlands-based insurer Ansvar to use telematics to gain an edge on competitors without a major investment. Additionally, Coloride provides a means to build a stronger relationship with customers, reduce operational costs and improve the claims experience.

In addition to a customised policy at a fair price, Coloride provides feedback on driving behaviour and phone usage. Good drivers who keep their eyes off their phone and on the road earn points they can spend on iTunes or Amazon purchases, or use points to donate to pre-selected projects. Customers can also use the app to ask for assistance, and compare themselves to other drivers on a leaderboard or in a 1-1 duel.