Warning, this post may sound a bit like an advertisement.

Last week I got invited to find out a new product from Tower insurance that’s launching today that they hope will not only lower car insurance costs but also help make driving safer. In a nutshell the product is a smartphone app that measures driving behaviour using GPS and the sensors in the phone. From that it works out if you’re good driver or not and if you are, can give you discounts off your car insurance of up to 20%.

For the first time in New Zealand, safe drivers can benefit from lower insurance premiums based on their individual driving performance – thanks to an innovative free smartphone app offered by TOWER.

SmartDriver’ monitors and assesses an individual’s driving behaviour based on 250 kilometres of travel.  Drivers who score well can then gain a discount on motor premiums of up to 20 per cent.

TOWER Chief Executive Officer David Hancock says TOWER’s strategy of innovating for the benefit of its customers is evidenced by the launch of SmartDriver. TOWER is always looking for ways to improve its risk profile, while lowering costs and providing enhanced value for customers.

“The insurance industry does not have a reputation for innovation, but TOWER is committed to delivering relevant products and better value to customers to help them protect the things they care about. This app is the first of its kind to be launched in Australasia.

“We’re really excited about SmartDriver’s potential to help customers in two ways – saving safe drivers money on premiums and encouraging safer driving for all New Zealanders.”

It’s all part of a move towards risk based pricing where those that present less risk pay less.

TOWER General Manager – Customer Proposition Mark Savage says the app means motor vehicle insurance premiums can now be determined using an individual’s driving behaviour, rather than solely relying on averaged claims risk and demographic data such as age and location.

“This kind of user-based-insurance – or UBI – has the potential to dramatically change the motor insurance market. TOWER has been monitoring the overseas experience for some time and we felt as a nation of drivers it made perfect sense to introduce it here.

“UBI provides fairer pricing to customers based on their driving, not just that of the population at large.  And there is the huge advantage of making those using the app more conscious of their behaviour on the road.”

Mr Savage says telematics, the technology behind UBI, enables driving data to be gathered and transmitted directly from a vehicle on the road to the insurer. The insurer can monitor, analyse, score and then adjust premiums accordingly.

“By collecting basic driving information such as trip duration, distance travelled, location, braking and acceleration, we can build an understanding of driving behaviour and individual risk and adjust premiums accordingly. The app also allows customers to see their score versus the average score calculated from all the SmartDriver users who have completed 250 kilometres using the app.”

Tower have said that this is just a first step on the road to greater risk based pricing and they said giving discounts for those that have a car but who might be using PT, walking or cycling during the week might be considered in the future. I certainly hope it’s something that happens.

While the insurance aspect is obviously the key point of the app, it’s the potential impacts on driver safety that interest me the most. Tower said that amongst staff who helped trial the app, they found driving behaviour improved the more they used it through a combination of driving at slower speeds as well as smoother accelerating and braking. One of the key ways Tower have managed to achieve this is through the gameification in the app that gives points for better driving, achievements and leaderboards. That means that even if someone does the same trip every day there can be an incentive to constantly improve. I’ve been trialling the app and certainly noticed myself trying harder to be a better driver.

I also think there are some potentially interesting implications from this kind of technology. For example as the app keeps a record including a map of the trip taken, parents concerned about their kids driving (if they’re driving at all ;-)) could require them to use the app and show them the results. Of course if that were to happen it would probably just push even more young people to simply not bother getting a licence, using other modes to get around.

So here are some images of what the app looks like.

Opening the app you simply push start for it to start recording your journey and stop again to end it. Only journeys of more than 2km count towards getting a score.

Tower Smartdriver app 1

At the end of each valid trip you get marked. Also notice the gameification elements (most of mine are like the one on the left)

Tower Smartdriver app 3

Delving into a trip gives more details. As you can see I went to Warkworth on Friday afternoon. Despite moderate traffic it flowed smoothly except for one part around Schedewys Hill where I got marked down for braking due to a truck crawling up the hill (fixing that part of the route is one of the few things that need doing to the P2W route). Note these aren’t the same trips as the images above.

Tower Smartdriver app 2

And here are the gameification elements which comprise of leaderboards and achievements. I would love to see something similar for HOP card users to encourage more PT trips. You have to register through the app to get these results and the official score after completion of 250km but it isn’t required to monitor individual trips.

Tower Smartdriver app 4

The app generally seems to work well but there are a few improvements I’d like to see e.g while the app is running it prevents the screen from turning off which is a pain, on Android the back button seems buggy and often backs out of the app rather than going back to the previous screen. It would also be great for them to tie in the app to a mapping app and surely it would be worthwhile measuring if someone is using a phone at the same time as driving.

Overall I think this is a good move by tower and the use of technology to improve driver safety is something I definitely support, a view obviously shared by Ernst Zollner who is also the NZTA’s new regional director for Auckland and Northland/

Ernst Zӧllner, Road Safety Director at the NZ Transport Agency, says any technology that has the potential to contribute to making New Zealand roads safer for users is positive.

“Creating a safe road system depends on safer vehicles, users, roads and roadsides, and safer speeds. It’s really good to see a private insurer sharing responsibility for improving road safety by using technology and incentivising smart choices. This is consistent with Safer Journeys, the Government’s road safety strategy to 2020.”

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      1. There is a classic car insurer that offers kilometre-limited plans that are pretty reasonable, I think they offer 5,000km, 10,000km and 15,000km plans. It’s not quite pay-as-you-go but it’s a pretty good idea.

        1. For risk, where those km’s happen is important. 5000km in inner-city Auckland is much riskier for an insurer than 5000km accrued on return trips between Auckland and Tauranga.

          1. False economy – it will take you forever in bumper to bumper traffic to travel the 5,000km you would rack up quickly on the open road between AKL and Tauranga 😛 But yes, the risk per kilometre is quite different.

        2. Yeah I saw ads like that at Britomart – clever targeting.

          Another thing an insurance company could do is provide rebates for HOP monthly passes (with some conditions, like the HOP card the monthly pass is on must be in the name of the insured for starters).

  1. Fascinating. Yup it is the smartphone that is the disruptive technology of our age. Potentially quite a transformative approach. I can see all sorts of people not wanting this…. Surely it would also give insurance companies evidence to prove driver fault and transgression? Another way of minimising claims?

    Increasing control of vehicles by computers and the recording of driver behaviour is likely to further undermine the idea that driving is a source of ‘freedom’….. .?

    1. I asked about the claims aspect and they said they won’t be using it for that and will instead rely on the existing processes.

      They were quite keen on extending it further through future developments but claims were ruled out

  2. Good for them. They’re likely to offer lower premiums to drivers who are slow but oblivious (there are plenty), but this tradeoff comes with higher premiums to those who drive aggressively (most of whom are not Sebastien Vettel, no matter what they think). It will save them money, so they’re right to go with it.

    Of course, if you want to save on car insurance premiums entirely, you can take public transport. Or use PT most of the time and take out a low-mileage policy.

  3. So all of those people that drive really slow and constantly cut people off, not braking because they are oblivious to what they have done, are the safe drivers? You would probably get a better score using this app if you drove stoned or drunk!
    Its a complete gimmick, using crash history like other insurance companies would tell you a lot more.

    1. If I was with tower, I would only use the app when taking long motorway journeys (and would turn it off when entering towns. Eg. If driving to Hamilton, turn it on after Sylvia park(?) and turn it off when the express way ends. Likewise, going north, turn it on after Albany and off once you hit the tunnel.

      I may have to ride right up the ass of a car to ensure I dont brake, maybe even duck in and out of lanes to avoid braking and avoid sharp acceleration. A few trips and I would hit 250km so I would qualify for a discount and would be free to drive like a manic around Auckland – you know – using the break sharplly when someone cuts you off, or stopping for that pedestiran crossing, deciding not to run that read light, or taking off quickly from an intersection so I fit into the flow of traffic, rather than make everyone else brake hard to avoid rear ending me as I cut into their lane.

      1. Apparently running red lights etc is fine as long as you do it slowly enough. But when you get a green light make sure you accelerate really slowly so no one behind you gets through the phase.

    2. You don’t happen to work for a rival car insurance company do you? haha.

      This kind of technology has been used overseas extensively and Tower say the company behind it has been able to build a lot of data on how to measure drivers. They will still be taking into account things like age and crash history but this will be a discount on top of that. Can’t see a company giving up to a 20% discount for just a gimmick.

  4. There will be exceptions at both the slow and fast end of the scale but overall, I think this is a great initiative. I will also collect speeds and compare to posted limits I presume?

    1. Surely you don’t think you can judge how good someone drives by how fast they accelerate and decelerate and how much slower than the speed limit they go? There is a lot more to driving the the accelerator and brake pedal! Add to that any bad driver could fluke 250km of good driving, any fast driver could slow down to get the cheap insurance, etc. And our speed limits are all wrong – if I drive at 49km/hr down Symonds Street I would be a safer driver than someone doing 101km/hr down the waikato expressway?

      1. Strikes me that Tower would be in a better position to judge this than you. Clearly they have decided that the answer is yes.

      2. Jimbo, absolutely I can. Smoothness on vehicle controls is an absolute key to good driving. And no, your 49kmh down Symonds St is not safer that 101kmh on the expressway (the divided part).

        1. Another improvement could be to measure frequent sideward movement to cater for those indecisive drivers who just can’t make up their minds which lane they want to be in. We’ve all seen them in action!

        2. So forget about looking in mirrors, driving in a straight line, being courteous, looking at the road – just drive slow and it will all be OK?
          How does the app know that the 50km speed limit on Symonds Street and the 100km speed limit on the Waikato expressway are wrong? I’m sure it would work off the posted speed limit, not what is a sensible speed.

          1. All of those things relate to smooth driving. Being aware of the surroundings reduces sudden stops. And I didn’t say drive slow. Watch Lowndes go around Bathurst and you’ll know what I mean.

          2. Understand what you are saying and agree that frequent heavy braking would probably imply you are a bad driver. But accelerating quickly doesn’t imply you are a bad driver, and driving below the speed limit doesn’t mean you are a great driver. If driving examiners used this app, almost everyone would pass (especially as learner drivers tend to accelerate and drive slowly) – that doesn’t mean they are great drivers.

          3. Quick acceleration has it’s place. Everything in context. When merging with quicker traffic it’s great. Quickly accelerating in the city leads pedestrians and other drivers to miscalculate. Not being a confident driver, as per the example of learners, doesn’t mean you are an unsafe driver necessarily. I know experienced (ie have had a licence for a long time) drivers who drive very erratically, and speed up / sow down in the same way. When something goes wrong, it’s always someone else’s fault even though their own driving style has helped create a situation.

          4. “just drive slow and it will all be OK?” – Basically yes.

            If the default speed limit in NZ was 30km/h (as in much of Europe) and an argument had to be made for it to be higher, less people (or even nobody) would die in NZ each year on our roads – simple as that.

            Plus more people would cycle as they would feel safer and we would have less obesity and heart problems. All for very little cost.

            The huge death toll from cars used to be considered a health issue (http://usa.streetsblog.org/2014/01/13/what-should-doctors-do-to-prevent-traffic-deaths/), now it is just part of the cost of hypermobility and the need to travel as fast as possible at all times for marginal time savings. Pretty sad state of affairs.

          5. 30kmh is ridiculously low. Not only will this regressively affect those with older cars without stop/start or electric technology (i.e. the poor), you’re also bringing the speed limit well within the reach of cyclists, many of which carry no speedometers. Making the road ‘safe’ by lowering the speed limit and then turning a blind eye to other road users doing it won’t sit well with people.

          6. Dan, 30km/h everywhere is not being suggested but, as per the Dutch example, many residential streets should be 30 km/h. You might have to drive 500m to get to a 50km/h road. Surely a small delay for the benefits slower speed mean for the safety of kids, the elderly, pets etc?

          7. I can agree with that in principal, but it falls down with our horrific town planning and many residential roads becoming de facto feeder routes – look at Tripoli Road in Glen Innes – still a residential street, but with a large amount of traffic moving along it all the same.

  5. On motorways, it appears the main form of crash is the nose to tail – most of these are not accidents, but caused by a deliberate choice by the follower to be less than 2 seconds behind.

    Perhaps Tower could build in similar feature as iOnRoad – an Android and iPhone app that uses camera on your phone to check your following distance to help you learn how far 2 seconds actually is (55m @ 100km/h – or about 10 car lengths).

    Check it out at http://www.cnet.com/news/ionroad-app-keeps-an-eye-on-the-road-for-accidents/ or http://www.ionroad.com/

    1. It’s essentially impossible to leave a 2 second gap on the motorway in Auckland – if you leave a gap that big, some bugger will merge into it, and presto, you’re no longer 2 seconds behind any more.

      1. You don’t need to have a 2 second gap on the motorway as long as you can see at least 10 seconds ahead, people still seem to forget that conditional

        1. I’ve never heard of that 10 second idea. Seems a little odd, as well – having conditional clauses and exceptions detracts from the punch of a rule of thumb.

          FWIW, the legal absolute minimum following distance at 100 km/h is 36 metres (about 1.3 seconds). But that’s a minimum, not a target…

          Ultimately, safe driving is about being prudent, not pushing yourself to the limits, and planning ahead in case things go wrong. Following the “rules”, whether laws or rough guides like the two-second rule, isn’t nearly enough.

  6. They’ve had this type of thing for a while in the UK. Tho I think those were installed in cars by the insurance company & monitored you always. It based your premium on a rolling average – so if you had to brake sharply once to avoid someone merging without indicating, say, it would not make much difference to your overall premium. But if you frequently over-accelerated then braked sharply, that would raise your premium a lot.

  7. What would make much much more sense is if they monitored how many hours you drive using the phone and charged per hour driven. Currently someone driving 40hrs/week pays the same premium as someone driving 40hrs/month. You would have to be a seriously bad driver to have the same risk profile as someone who drives 30 times more than you! Like I say, this is just a gimmick.

    1. Agree – I get charged high premiums as I drive a high risk car. But I only drive 5000km a year and only every second weekend on average.

      1. And worse if you own multiple cars – you can only drive one at a time, so the accident part of your premium should be charged per driver, not per car.

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