In a recent conversation between COVER’s Tony Van Niekerk and Robert Attwell, CEO of Discovery Insure, key insights were shared on how telematics is being leveraged to not only improve driving habits but also enhance vehicle resale value and optimise insurance products.
The integration of telematics into vehicle insurance has revolutionised the industry, providing insurers and drivers with valuable data on driving behaviour, vehicle condition, and accident risks.
Telematics and driving behaviour – Telematics data provides a comprehensive view of a driver’s habits, including acceleration, braking, cornering, speeding, and even phone usage while driving. These factors play a significant role in determining accident risk. According to Robert Attwell, this data allows insurers to reward responsible drivers with up to R1500 in fuel cash back, incentivising safer driving behaviour.
Beyond accident risk, the data also helps in analysing how driving habits impact the wear and tear of a vehicle. For instance, harsh maneuvering and cold starts—where a driver accelerates aggressively within the first few minutes of switching on the car—can negatively affect a vehicle’s long-term condition. By monitoring such behaviour, insurers can offer additional insights to their clients, helping them maintain their cars better and potentially increasing their resale value.
Predicting mechanical breakdown through data – A key innovation discussed was the use of telematics data to predict the likelihood of mechanical breakdowns. Attwell highlighted that by analysing road conditions, driving patterns, and other key variables, insurers can determine which factors contribute to long-term vehicle degradation.
Through advanced modelling, Discovery Insure found that smoother driving leads to a lower risk of mechanical failure. This insight can be highly beneficial for car owners, as careful driving could mean a higher resale value when selling their vehicle. The ability to quantify these benefits adds a new dimension to insurance policies, where clients are not just protected against accidents but also against depreciation due to poor driving habits.
The Role of Warranty Insurance and product innovation – Discovery Insure has further expanded its offerings by integrating warranty insurance into its ecosystem. Clients who have comprehensive motor vehicle insurance can add warranty coverage, giving the insurer a better understanding of mechanical breakdown risks beyond just accident-related claims.
By combining warranty insurance with telematics data from Vitality Drive, Discovery Insure has created a system where driving behaviour directly influences the long-term performance and reliability of a vehicle. This not only benefits the insurer in managing risk but also provides tangible value to policyholders by offering better coverage and higher resale values for well-maintained cars.
How Vitality Drive integrates with Discovery Insure – Vitality Drive, a rewards-based telematics program under Discovery Insure, plays a central role in collecting and analysing driving data. Attwell explained that all Discovery Insure clients have access to this data, allowing them to monitor their driving habits and their impact on insurance benefits.
While data protection laws, such as South Africa’s POPIA (Protection of Personal Information Act), impose restrictions on data sharing, Discovery Insure ensures that all shared information is anonymised and used responsibly. The primary goal is to enhance the client experience by providing meaningful insights without compromising privacy.
Monetising safe driving: The Vitality Car Rating Certificate – One of the most exciting innovations discussed was the introduction of the Vitality Car Rating Certificate. This certificate serves as an official record of a car’s driving history and condition, providing transparency for potential buyers.
For second-hand car buyers, one of the biggest concerns is not knowing how a vehicle was driven by its previous owner. With the Vitality Car Rating Certificate, buyers can see detailed information about how the car was handled, offering them greater confidence in their purchase. This could be especially beneficial for high-performance vehicles or models known for aggressive driving, as it provides verifiable proof of careful ownership.
Additionally, Discovery Insure has partnered with leading car dealerships and resale platforms to ensure that clients who drive responsibly can receive a boost in their vehicle’s resale value—potentially up to 15%. Notably, this boost only applies to active Discovery Insure clients, creating a strong incentive for policyholders to remain loyal to the insurer.
The launch of these telematics-driven initiatives has been met with enthusiasm from both clients and brokers. According to Attwell, brokers appreciate that they can now offer added value to clients beyond just price-based competition. By demonstrating how responsible driving directly translates into financial rewards, brokers can build stronger, longer-term relationships with policyholders.
The media has also responded positively, with significant coverage following Discovery Insure’s launch event at the Zwartkops Raceway. The event showcased the real-world application of telematics data, demonstrating how this technology can benefit both drivers and insurers.
Changing perceptions of Telematics over time – Telematics has been a core part of Discovery Insure’s offering for over 13 years, with over 20 billion kilometres of driving data collected. Over time, customer perceptions have shifted from scepticism to acceptance, particularly because Discovery Insure has positioned telematics as a tool for rewards rather than penalties.
Unlike traditional insurers who might use telematics to raise premiums for risky drivers, Discovery Insure focuses on rewarding good driving habits. Additionally, telematics data is used to enhance client safety, such as automatically detecting accidents and dispatching emergency medical assistance through the Impact Alert system.
This approach has led to a high adoption rate among clients, as they see telematics as a way to gain tangible financial benefits rather than a tool used against them.
The future of Telematics in insurance
The integration of telematics into insurance policies is transforming the industry, moving beyond accident prevention to enhancing vehicle longevity and resale value. Through initiatives like Vitality Drive, the Vitality Car Rating Certificate, and warranty insurance, Discovery Insure is redefining the relationship between insurers and policyholders.
By leveraging data-driven insights, policyholders are not only encouraged to drive safely but also stand to gain financially through better resale values and rewards. As Discovery Insure expands this model to international markets, telematics is set to play an even bigger role in shaping the future of vehicle insurance.
Ultimately, this innovation benefits everyone—drivers get better deals, insurers can better assess risk, and the second-hand car market becomes more transparent and trustworthy. It’s a win-win scenario that showcases the power of technology in reshaping traditional industries.