The impact of vehicle telematics-based insurance rewards on the driving behaviour of short-term insurance policyholders

Abstract

This thesis explores the impact of telematics-based reward schemes on the driving behaviour of policyholders in the South African insurance sector. Using data collected from a leading South African insurer's telematics database, this research employs a combination of descriptive and inferential statistics to investigate the relationships between demographic characteristics, telematics rewards, and driving behaviour. The findings indicate that demographic characteristics when considered together, have a statistically significant relationship with telematics rewards. Telematics rewards, in turn, exhibit a substantial relationship with driving behaviour. While the relationships between demographic characteristics and driving behaviour were not statistically significant, their influence on driving behaviour is noteworthy. This research contributes to the understanding of how telematics-based reward mechanisms can influence and incentivise safer driving practices among insurance customers. It has academic and practical implications, shedding light on the potential benefits for the insurance industry in offering personalised insurance premiums based on individual driving behaviour. The findings provide insights for policyholders, insurers, and policymakers seeking to promote road safety, reduce insurance premiums, and enhance customer satisfaction.