Dash cams a bigger factor in coverage and claims
When a Transasia Airways plane crashed into the Keelung River in Taiwan on February 4, the tragedy was recorded by at least two drivers’ dashboard cameras. In one video, a motorist is cruising down the highway, following a yellow taxi. When the driver rounds a bend, the twin-engine turboprop plane comes into view—it’s massive compared to the vehicles. The plane turns on its side and its wing clips the top of the taxi, and then the bridge, before falling out of view and into the river. And it all happens in a matter of seconds.
It wasn’t mere coincidence that the accident was caught on tape. In places like Taiwan, South Korea and Russia, the use of dash cams is widespread. A 2012 Al Jazeera report estimated that a million people in Russia had already had them installed them in their cars.
Dash cam usage in Canada certainly isn’t the norm, but is becoming more popular. Alex Jang, founder of blackboxmycar. com, an online dashboard camera store based in Vancouver, says that Canadians have slowly started catching on to the benefits these cameras provide. In 2012, Raguruban Yogarajah was charged with fraud over $5,000, attempted fraud and public mischief after Herman Sham’s dash cam recorded Yogarajah’s car backing into his car on Highway 401. Sham uploaded the footage to YouTube and it went viral.
If telematics is a subject for debate and anxiety in insurance, imagine how intense the discussion will get when dash cams are finally connected to your vehicle’s telematics and other tech, like your collision alerts and your blind-spot cam. Ford has already partnered with Intel to study how interior-facing cameras can be paired with sensor technology and data analytics.
Driver authentification is one reason for linking them all up. According to a Ford release, when a driver enters the vehicle, the interior-facing camera would take his picture. If the driver’s identified as the vehicle owner, their personal data, like music, calendar and contacts, would be synched to the car. If the driver isn’t recognized, a photo will be sent to the owner’s smartphone. If the person driving the car is identified as, say, the owner’s 17-yearold son, the owner could set certain usage restrictions. The son would have to wear his seat belt in order to drive the car, for example, or keep his music’s volume at a set level.
It’s all pretty cool—or freaky, depending on how you look at it. “With everything that’s going on with autonomous driving and vehicle infrastructure technology, these kinds of advances depend on cameras and sensors around the car … to take place,” says Jack Palmer, project director at UK-based TU-Automotive. “So with the trend towards autonomous driving, I think this is going to become extremely widespread very quickly.”
But dash cams are having a crucial impact even before we get to that point. Roman Bryl, brand and proposition manager at Swiftcover.com, a UK-based online insurance company and subsidiary of AXA Insurance, says their footage can speed up the claims process. “Eyewitness testimony often can be conflicting, and disputed claims can take forever to kind of be settled. So we figured that it’s a good thing if our customers had a camera in their car, and that they can provide video evidence to show exactly what happened. So the benefit to us is that we can settle claims faster, and where we’ve got video evidence that supports that our customers weren’t at fault, then liability will rest entirely with the third party. So for the customer, that’s a good thing too.”
In April of 2014, Swiftcover launched a program that offers a 10 percent premium discount to customers with dashboard cameras installed in their cars. Bryl says there are currently about 1,000 policyholders signed up for the program, a number that is in line with the company’s expectations, given that dash cam penetration is still low across the UK.
“The camera doesn’t lie”
So far, “Big Brother” concerns haven’t been an issue, he says, because the footage belongs to the driver. Swiftcover will only ever request to see the dash cam footage in the event of an accident, and even then it’s not mandatory that a driver relinquish it. “When we launched this, we decided that we wouldn’t get customers to sign up to be contractually obliged to provide footage. So if, for example, I don’t know, the dash cam itself got damaged in the incident or it was broken, then we wouldn’t penalize the customer.”
But what if a customer signs up for the program to get the premium discount and then never turns on the dash cam? It seems like an easy way to take advantage of a good deal. Bryl admits that this could be an issue. He says Swiftcover considered giving the discount only to customers who had the dash cam professionally installed so that it would turn on automatically when the car started, but ultimately the company decided against that.
“We figured that if we restricted our offer in that way then… the take up would be much smaller, [and] it’s going to take us longer to learn whether or not it’s providing a benefit from a claims perspective. So we decided to broaden our offering, take the risk that in some cases video footage may not be available from people who [haven’t] got it permanently installed.” It’s early days, says Bryl. They’ll see how the product evolves, but for now, they’re happy with the offering.
Dash cams aren’t just being used on the personal side; they’re incredibly beneficial to commercial clients as well. Nora PHOTO BY: REX Hillyer, senior vice-president, customer excellence, transportation & logistics at Northbridge Insurance, says her company is recommending the use of dash cams in commercial trucking fleets. “What we’re trying to do here at Northbridge… is we’re trying to measure the performance of the driver and improve the driver’s behaviours so that you’ve got a better driver. Because one of the biggest things in the trucking industry today is driver shortage.”
In the past, she says, if a driver wasn’t performing well, he or she would simply be fired. “But if you fire your driver, what are you going to do, hire somebody else’s problem? There’s a 30 percent chance that you’re going to be doing that. So if you can improve your driver’s behaviour, and modify his behaviour through the information that you’re receiving through a dash cam, then you’ve got a better fleet, you’ve got better performers in your fleet.”
Northbridge recommends the use of two-way facing cameras that are trigger-based. Most dash cams are constantly recording but not saving the footage. So for example, if a driver swerves out of his lane, that will trigger the camera to save the footage from about 10 seconds before the trigger to 10 seconds after. The footage is then transmitted to the trucking company for review. The two-way facing camera is also important because it can show that the driver swerved to avoid something in front of him, but it will also show if he was doing something wrong, like texting, at the time of the incident.
While Hillyer admits that some drivers will raise privacy concerns, she stresses that the footage is used for coaching, not as a means of corporate surveillance. “If you’re driving safely and there’s no risky behaviours occurring, we’ll never know about it.”
While Northbridge doesn’t offer a premium discount to trucking companies that install dash cams in their fleets, she says there are indirect benefits. “What they will find is their performance improves, so their risk is better, they’re not as risky of a company… When the loss experience improves, then the premium goes down.”
And there are benefits for the insurer as well. Like Swiftcover’s Bryl, Hillyer also says that dash cam footage can help speed up the claims process. “It really helps us in the event of a claim, because we know which ones should go to trial and we know which ones we should settle quickly. There’s no question about who’s at fault. The camera doesn’t lie.”
They can also help in identifying and cutting down fraud. The classic is the organized ring’s bump-and-claim, where “oddly enough, there are several people in the car and they all have soft tissue injuries,” says Donald Light, director of Celent’s Americas Property/Casualty Insurance practice. “And if you had a dash cam, the odds of being able to contest or fight that claim and identify this fraud are major.”
Light says dash cams could also benefit clients with high frequency or high severity losses. “So taxi cabs, for example.”
“Definitely taxis, buses, 100 per cent,” says Northbridge’s Hillyer. “Even on public buses, you know, you get a lot of slip and fall claims. Then you can see if that person really did slip and fall, because the driver doesn’t know sometimes when [the person who falls is] in the back of the bus.”
Light says insurers could make the use of dash cams an underwriting or pricing criteria. “Here, you’re sort of taking the responsibility of analyzing the thousands of hours of video away from the insurance company and putting that on the policy holder or the commercial enterprise. But the insurance company just says, ‘Well do you have a program? Check. Do you use video? Check. Do you use incentives or disincentives based on all that? Check. Okay, you get a 3 percent discount on the premium.’ ”
But the question still remains whether North American insurers will ever provide incentives for using the technology.
The answer to that isn’t so simple, says Light. There’s an argument that by installing a dash cam in a car, the driver of that vehicle will be more careful on the roads because he knows he’s being recorded. And if that driver is at a lower risk of getting in an accident, then he should get to pay a lower premium. But in order to provide a discount, says Light, insurers need to have an actuarial case—evidence that dash cam drivers actually are safer drivers—for providing that discount. They’d need to analyze a lot of dash cam footage—and insurance companies aren’t going to pay someone to watch hours of footage, says Light. And he doesn’t know of any analytic program that does this.
When I asked if North American insurers will ever provide discounts for drivers with dash cams, he pointed me to an article that said driverless cars will take over the roads in the next 15 years.
“The answer to your question,” he said jokingly, “is it won’t matter because there won’t be any drivers to be recording behaviour of.”
Still, the idea that autonomous vehicles will have a “near monopoly by 2030,” as the article claims, is an extremely best case scenario, says Light. Driverless cars are coming, but before they become ubiquitous, the insurance industry will have other issues to contend with. All the other technologies that are currently making our cars safer, Light argues, will lead to fewer accidents, resulting in lower losses and lower premiums—which could be bad for the industry.
It’ll be interesting, however, to watch the footage of the very first accident that happens between a car with a human behind the wheel and the driverless vehicle. Kneejerk logic presumes the human will be at fault (isn’t he or she always?). But that’s the great thing about dash cam footage— it can be full of surprises.
Copyright 2015 Rogers Publishing Ltd. This article first appeared in the March 2015 edition of Canadian Insurance Top Broker magazine