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22 November 2012
Young Chartered Insurance Institute (CII) members are pushing for a thorough analysis of the effect of speed awareness courses on driver safety and how they should influence the premiums insurance companies charge motorists.
The recommendation follows a BBC investigation suggesting that some insurers are treating drivers who have attended speeding awareness courses as a higher risk, so warranting increased insurance premiums, despite police claims that insurance prices should be unchanged for those motorists.
The CII's New Generation Underwriting Group - part of the CII's faculties and made up of industry professionals who volunteer their time to research ways of improving insurance industry practices - has been involved in researching the issue of speed awareness courses and insurance. Its final report, now published, calls for further scrutiny of the long-term impact of the courses on driver behaviour.
Speaking on behalf of the Group, James Ward says:"There has, so far, been a lack of analysis into the impact of a speed awareness courses (SACs) on driver behaviour and whether the risk of accident or further convictions is different compared with convicted speeders as only short-term effects have been measured.
"We have been working closely on this issue with key stakeholders, including the National Road Safety Board and the Association of Chief Police Officers, and have put together a complete research proposal for the insurance sector and police to collaborate on showing definitively the impact of SACs. This analysis needs to be progressed to gauge the long term effects on drivers who attend a course. In turn, this will allow the industry to understand if, statistically, these drivers are an increased risk, a lower risk or no different when compared to drivers either with or without speeding convictions. Once completed, individual insurance companies can make informed decisions on the premiums they wish to charge with full confidence their prices are fair."
James adds:"A lack of clear information on the subject has created confusion among drivers and insurers regarding whether or not attendance at a course should be disclosed. The Financial Ombudsman has confirmed that if drivers have attended a course they can honestly answer "no" to the question asking whether they have a motoring conviction or prosecution, as neither of these apply to drivers who have attended a speed awareness course.
"The insurance industry and those who run speed awareness courses need to work together to establish the true impact of these courses to ensure that customers are charged a fair premium that reflects their level of risk.
"Individual insurers can then make an informed decision on the premiums they wish to charge with full confidence. Equally, course providers will be able to understand the long-term impact of their courses and use the findings to assist with their on-going efforts to improve their effectiveness and ultimately improve road safety for everyone."
More than one million people attended a speed awareness course last year rather than be convicted of speeding. This is a significant number of people (2.7% of the total driving population) who currently represent an unknown risk to insurers, which means they may not being paying the correct premium. This is a growing issue for the industry as more people opt to attend these courses in the hopes of avoiding the insurance premium that comes with a speeding conviction. It could even expand into other areas, for example those caught driving whilst using a mobile phone.
One major issue is there is no consistency of data. Not all police authorities provide National Driver Offender Retraining Scheme (NDORS) approved courses. This means that a driver could potentially attend more than one course in a short period of time (in different geographical areas) and still not receive a conviction. One recommendation of the CII Group is that data on all course attendees, regardless of police authority or course provider, should be stored centrally.
The CII's New Generation initiative aims to complement existing company talent programmes and give selected individuals additional exposure to market issues and tools to equip them for future leadership. There are four groups depending upon specialism - Claims, London Market Insurance, Broking and Underwriting - and each group has the opportunity, during the year of their programme, to make its mark on its sector of the profession by being involved in an industry project of their choosing.