Santam shifts gear for safer roads with Vodacom

Santam shifts gear for safer roads and a more sustainable industry

‘Vodacom LiveTrack enables us to insure people based on individual habits and risks… not on broad macro assumptions about groups.’ Shehnaz Somers, Santam

The younger the driver, the higher the vehicle insurance premium. Because drivers younger than 25 are a greater insurance risk than more experienced drivers. And male drivers are a greater risk than female drivers. Right? Well, not necessarily.

Leading short-term insurer, Santam, in partnership with Vodacom has just introduced innovative technology that calculates insurance premiums not on traditional criteria (such as age and gender) but on the driving behaviour of individual motorists.

Shehnaz Somers, head of personal lines underwriting at Santam, says the product, Vodacom LiveTrack, is fitted to insured vehicles. It monitors and records how the vehicle is driven, how often and when it is driven.

“It provides us with an empirical database of information by which we are easily able to assess how safe a driver is. The device records speed, acceleration, braking, distance travelled and so on. It does not record age or gender. It is set to be the ultimate equaliser in motor vehicle insurance… rewarding people for safe driving by lowering vehicle premiums by up to 20 percent.”

Santam is continuously enhancing its rating models, she says, to take advantage of new developments in technology that can benefit its clients. “It’s not completely fair to levy a premium based on averages taken from a pool of good and bad risks. We have the technology today to treat clients as individuals. And this is exactly what we’re doing with LiveTrack.”

The benefit is based on Santam gaining greater insight into the risk being insured. This lies at the heart of how Santam approaches its business at large.

South Africa’s road safety record is of concern to everyone, she continues. But for the short-term insurance sector, it impacts on continued affordability and on the sustainability of motor insurance. For insured motorists, it elevates the cost of vehicle insurance. For the owners of the country’s 70 per cent of uninsured vehicles, it threatens dire personal crisis; and for the larger economy, its implications are extensive and damaging in the form of lost people hours, productivity and the cost of emergency services.

“Becoming a safer driver has never been more important. The roads are policed but it’s very important for people to take responsibility themselves for their driving habits. Until now, there has been nothing to help drivers become safer behind the wheel … other than practising considerate and cautious driving habits and keeping a well-maintained car.”

LiveTrack is different to anything else. It focuses on the security of both driver and car. It offers proactive tracking, recovery and it promotes safe driving behaviour. The device enables individual motorists and commercial fleet owners to monitor their own or their family and staff member’s driving behaviour and tells users exactly where their vehicles are at any given time. As important, it offers significant short-term insurance savings to safe drivers.

Vodacom LiveTrack rewards Santam clients for being good and safe drivers. It addresses the situation of high vehicle premiums based on risks beyond the control of clients and puts management of cost of insurance back firmly in the client’s hands.

Vodacom LiveTrack costs R162.05 a month. This includes vehicle recovery services. After 36 months, the cost drops to R39 a month. Installation of the device is free for Santam clients.

Then there’s also all the optional value adds such as reports of all trips undertaken since installation; the provision of a tax logbook at the end of the financial year; geofencing (which sends an SMS to the owner the second his or her vehicle leaves a defined area); and medical roadside and home assistance.

“More than 13 700 people died on South Africa’s roads in 2009. These are the most recent official figures available. There were 10 857 fatal road accidents in that year,” says Somers. “And while people like to complain about the condition of the roads, the fact is that 95 percent of accidents are a direct result of traffic offences or dangerous, reckless driving.

“These numbers and this reality are of deep concern to us. We are confident that the Vodacom LiveTrack service addresses this problem, and will do much to curtail the cause of motor vehicle accidents and deaths in South Africa.”

“In the medium to long term, LiveTrack is going to play its part in building a more sustainable short-term insurance industry; a stronger economy and a safer, less exposed populace.”