Atlas Magazine June 2007

Progress must go on

Does technological innovation always mean progress? The development of new technologies has already thrown so many plans right out and upset consumption patterns. So, in the insurance sector, electronics has created a situation that is worthy of a science fiction scenario, yet very real indeed.

A new motor insurance “pay-as-you-drive” scheme, born in the United States and recently applied in Great Britain, may well undermine insurance foundations based on the principles of solidarity and risk sharing. Far from being a passing mood, this procedure, which is regarded as an interesting niche, is well poised to get established across Europe.

Connected to its insurer with a GPS system in real time and on a continuous basis recording all parameters of vehicle driving, the motorist is, henceforth, at liberty to alter one's relation with the car in a fundamental way.

Having a vehicle kitted out - such a plane - with a black box, nothing can prevent this new type of driver from picking the areas and the timings of his or her movement according to his or her personal assessment of traffic risks. The insurers, on the other hand, are endowed with an exceptionally efficient tool that allows them to address hazardous driving promptly by raising tariffs. Non-compliance with Highway Code will, therefore, be penalized by means of higher insurance premiums.

Being still at its first steps, this scheme does not allow to measure its impact on road safety and traffic accidents; this scourge and its accompanying disasters, therefore stand as real health issues and as serious obstacles to development in countries with low income.

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