Old Mutual Insure builds a bot called UBI

20 August 2020 Old Mutual Insure
Soul Abraham, Executive for Retail at Old Mutual Insure

Soul Abraham, Executive for Retail at Old Mutual Insure

User-based Insurance comes of age in lockdown

The COVID-19 lockdown has rapidly accelerated the relevance of user-based insurance. This is highlighting the creation of a bot called UBI, that could save Old Mutual Insure policyholders up to 30% on their motor vehicle premiums each month. Essentially UBI will allow policyholders to save money if they drive less relative to their pre-COVID-19 driving habits.

Data from Tracker, a vehicle recovery business with over a million South African subscribers, indicates that, in the first month of lockdown, the average South African vehicle owner drove 1 150 fewer kilometres, spent 30 hours less on the road and saved R1 350 in fuel, compared to previous months.

While Old Mutual Insure and some other insurers introduced reduced premium options reflecting the fact that people working from home during lockdown were generally only using one vehicle for occasional essential trips, these discounts were not based on individual data. It also “did not reflect the actual use and risk reductions of individual policyholders,” says Soul Abraham, Executive for Retail at Old Mutual Insure.

The changed circumstances that vehicle policyholders are finding themselves in during lockdown, coupled with increased financial pressure due to reduced incomes, “saw Old Mutual Insure rapidly advance the development of a user-based WhatsApp chatbot,” says Abraham.

This chatbot called UBI, short for user-based insurance, represents significant innovation in being accessible to customers on their phones, via WhatsApp. UBI enables Old Mutual Insure allsure, motorsure and Elite vehicle policyholders to “use their phones to photograph their odometer readings and send a pic of their personal vehicle mileage via UBI each month,” explains Abraham.

“Discounts can be applied ahead of billing, based on the distance covered in the preceding month,” says Abraham. In this way, “any savings realised stay in policyholders’ accounts and don’t have to be refunded later, as was the case with previous relief efforts” says Abraham.

The Covid-19 pandemic is driving a fundamental shift in policyholder behaviour, resulting in less risk exposure. It is only fair that this reduced risk translates, accurately, into savings for individual customers. “We believe that money in the bank is the best strategy to support customers to manage the impact of the lockdown,” says Abraham.

Fortunately, the technology is here to provide individualised user-based data via WhatsApp to a busy little bot able to reduce premiums in line with personal vehicle usage. Since Old Mutual Insure’s UBI does all this ahead of premium deduction each month, “our bot keeps money in our customers’ pockets, which is exactly where it belongs in these challenging times,” concludes Abraham.

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