In February 2019, pay-per-mile telematics motor insurer By Miles raised £5m ($6.6m) in a Series A funding round. It intends to invest the funds in customer service and in-app claims handling, as well as rolling out new offerings. Yet the company should remain loyal to its core concept of only tracking the miles driven.
On paper, telematics policies should be especially appealing to younger drivers, as they typically offer lower premiums in exchange for providing insurers data concerning the user’s driving style, distance, and time. However, findings from GlobalData’s 2018 UK Insurance Consumer Survey show that 46% of drivers 25 and under have an issue with the idea of someone or something grading their driving ability.
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Clearly this highlights that despite the benefits young drivers receive in the form of lower premiums, the monitoring nature that is fundamental to the majority of telematics policies is a barrier to increasing uptake within the very demographic it is targeting.
Despite being a telematics-style policy, By Miles offers a different take on the idea, only monitoring the miles driven by the individual. The result is a far less intrusive telematics policy that still benefits the younger demographic (and those who drive under 7,000 miles annually) through lower premiums.
This unique approach is a clear differentiator to others in the telematics space, and should not be lost through further product development. Instead a two-product system should be offered. Individuals who are happy to share more details about their driving style can do so – potentially receiving lower premiums in the process – while those who feel this is too much information can remain on the current offering.
Expanding product offerings could have been a driving factor in the success of the fundraising round, as investors may feel the company’s product offering is too narrow. But By Miles should not jettison its current offering entirely, as this is what sets it apart from others in the telematics industry.
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