Allstate is putting its usage-based insurance product, Drive Wise, to the test, giving its employes and agency owners a chance to offer suggestions on how to enhance the product.
The crowdsourcing technique is among the first, if not the first, for an insurance product.
The Drive Wise product is available in Illinois, Ohio and Arizona, with additional states slated for this year.
The insurer’s previous internal testing provided Allstate with more than 11 million miles and 350,000 hours of driving data to help identify the safer driving habits that can earn participating customers driving discounts on their car insurance.
The initial testing shows the product does change people’s driving habits. Based on its internal data, just 25% of drivers in the initial group of testers scored in the ideal “safe zone,” leading to the best auto insurance rate available. Over the test period, the number reaching the “safe zone” reached 75%.
“Our early experience with Drive Wise indicates telematics technology has the potential to save lives, reduce injuries and save millions of dollars in property damage each year,” said Bob Otis, senior vice president of Allstate’s auto product operations. “Launching this crowdsourcing test of our unique, usage-based insurance device, will help us create a better product for our customers, while encouraging our employees and agency owners to examine and improve their own driving habits.”
Employing advanced telematics technology, Drive Wise uses the OBD-II port, the diagnostic port found under the dashboard on most cars after the 1996 model year, to track driving behavior. Drive Wise participants plug in the small, wireless telematics device, and then go online to learn about their habits behind the wheel to see what they can do to become safer drivers. The web portal also displays the potential performance discount a customer may be eligible for based on their driving habits.
During the first policy term of using the telematics device, participating customers are rewarded with a 10 percent discount through Allstate’s Drive Wise program. Driving discounts in subsequent policy terms shift to a performance rating approach, where customers’ driving behavior and total mileage driven determine the savings. Rates will not go up based on driving scores, but savings of up to 30% can be earned by drivers with the safest driving scores and lowest mileage, the insurer said.
