Saskatchewan UBI program targets motorcyclists

Jan

Jan Stojaspal

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6th March 2014

With its flat prairie land and wide-open spaces, the western Canadian province of Saskatchewan is a motorcycle rider’s paradise, particularly during the summer months.

The problem is that Saskatchewan also gets plenty of motorcycle accidents, particularly among younger, less-experienced riders, and that they don’t pay anywhere near enough in insurance premiums to cover the cost of their claims and other expenses.

Local research indicates that insurance rates would need to go up by as much as 70% to break even on motorcycle-related accidents.

And so when SGI let it be known early last year that it was considering further jacking up insurance rates for motorcyclists, and loud howls of protest followed, the state-run, monopoly insurance company figured that perhaps the time had come to bring telematics into the equation.

“We have a problem with motorcycles; obviously they’re not paying a near rate and they don’t want to pay any more,” says Don Thompson, SGI’s vice president of product management. “So we said, ‘We’ve got to improve your driving behavior.’ We did a lot of research on this, and we felt telematics may be part of a solution to reduce the number of accidents.”

Telematics to the rescue

While there is a growing body of evidence on how insurance telematics can encourage automobile drivers to drive more safely, no one has ever put together an insurance telematics program for motorcyclists.

SGI was not even sure what actually constituted safe or unsafe riding behavior. The data was simply not there.

So SGI’s first priority was to put together a pilot program using a couple hundred volunteer motorcycle riders, with the goal of developing a pool of data and knowledge.

The pilot program was conducted during the summer. And the collected data is now being assessed as the basis for a full-up program which should go into effect later in 2014.

In Canada, most usage-based insurance (UBI) programs utilize wireless dongles that are plugged into the vehicle’s OBD2 diagnostic port. But since motorcycles don’t have diagnostic ports, Quebec-based Baseline Telematics developed a small tracking device that is hardwired into the bike itself.

“This will allow us to create brief instructions and mathematical models to try to figure out how a driver behaves on the road and what is safe driving,” says Guillaume Giraudon, vice president of technologies at Baseline Telematics.

Turning the corner

The research showed that one of the biggest causes of motorcycle accidents was bad cornering. “A lot of accidents happen in corners,” SGI’s Thompson says. “Our data tells us that, and we’ve seen a lot of data sources that say it’s a problem for especially young, learning riders of motorcycles. If you don’t properly come into a corner, it leads to problems.”

Being still in pilot phase, the SGI program currently does not have a rating element attached to it that would determine the premium the driver would pay. Thompson expects that will be brought in soon. “We think that how much you pay for insurance possibly changes your behavior, but we also think us taking action based on your driving will change your driving behavior,” he says.

He also envisions that motorcyclists would, for example, get weekly feedback on how their behavior compares with that of more-experienced riders. “If you have a pattern of hard braking, hard acceleration, when we can tell you’re having a problem with cornering, we would have different actions based on how many times you’ve been doing it,” Thompson says. “So you may get a phone call. You may get called in to talk about it and be shown what the issues are with your driving. If it’s more training you have to take, we would prefer to do a carrot rather than a stick approach [that would equal] to taking your license away.”

Carrot over stick

Being a government-owned organization that not only provides auto insurance but also handles driver’s licenses and auto registration as well as operating the Saskatchewan Auto Fund, SGI has quite a bit of freedom in how it chooses to operate.

Nevertheless, Thompson says the company prefers engagement to coming off as being adversarial or authoritarian. Likewise, SGI doesn’t want to be viewed as an insurance company that doesn’t know what it’s doing, which is one of the reasons it set up the Motorcycle Review Committee, a volunteer body of motorcycle riders helping with the program and providing feedback.

The more involved the Saskatchewan motorcycle community is, the better job SGI can do making the behavioral thresholds realistic and fair, according to Thompson. “We have really good, engaged riders,” he says. “We’ve got some young kids who are engaged with this, some older guys and people who’ve been driving for a long time. We’ve also got owners of motorcycle shops. [Many were] part of the pilot, and we’re continuing to use them to develop this program.”

Canada has among the strictest privacy laws in the world, and while this has been a problem for insurers in Ontario and elsewhere, Thompson says it has not presented any real problems for SGI. “When we sign up people, they sign an agreement on what we’re using the data for, how we store the data, all that sort of information,” he says. “They sign off before we begin using this device.”

He also says that data portability is not an issue either since SGI doesn’t currently share its data with other provinces.

Assuming the introduction of insurance telematics for motorcycles goes without a hitch, there are a number of niche telematics areas SGI would like to expand into in the future. “Probably the next group we’ll be expanding into will be taxis,” Thompson says. “We started with motorcycles just by chance. Our plan is to use it in vehicles too.”

Brenan McNally is a regular contributor to TU.

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