Young driver insurance that’s all carrot and no stick
A uniquely positive, rewards-driven approach to safe driving has been launched by telematics car insurance provider, Carrot; changing the face of how young drivers interact with their insurance provider, and how they see the benefits of driving safely.
As the name suggests, Carrot is entirely based on the principle of reward. The pioneering approach gives young drivers the opportunity for lower premiums from the outset as well as generous cash rewards based on their individual driving performance. There is also the opportunity to earn a further reduction against their renewal premium by driving safely throughout the policy year.
Using a telematics unit – the i-box – Carrot has created a bespoke driver feedback platform that offers total transparency and a genuine opportunity for the customer to feel fully engaged in the process of driving more safely. Through a simple to use online Dashboard, each policyholder has full and transparent access to their own individual Driving Style score, and can see the impact each and every journey has on their overall scoring and the value of cash rewards they can earn. What’s more, Carrot is engaging with its audience via social media, meaning users can post their Driving Style scores on Facebook, and see how they compare with their friends – making safe driving a joint goal.
The i-box monitors various aspects of driving style, such as acceleration, braking, swerving, and the number and length of journeys made. This information is then aggregated into three categories – Speed, Smoothness and Usage – that are then combined to give an overall Driving Style score, from which quarterly rewards are calculated, with customers being able to earn up to a maximum of 15% of their annual premium back in cash rewards.
Uniquely, all of the rewards earnt by Carrot’s customers are paid onto the policyholder’s personal Carrot Card prepaid MasterCard®. Accepted at over 32 million locations worldwide, it can be used in-store or online (or the rewards can be withdrawn at any cash machine) and it attracts a generous rate of cashback when used to make purchases at a growing network of leading high street retailers.
The Carrot Card and user-friendly attributes of Carrot’s Driving Style ‘Dashboard’ are not the only things that set it apart from its competitors. More unique still is the principle that bad driving will not be penalised through mid-term increases in premium; premiums are set for the policy year and will not change providing the policyholder’s details and annual mileage remain the same, irrespective of the Driving Style score they have achieved. There are also no curfews or restrictions on driving at night or with friends. The thinking behind the ‘all Carrot, no stick’ philosophy is that it creates a consumer mindset where it literally pays to drive carefully – without imposing draconian measures in an attempt to enforce changes in behaviour.
How Carrot’s reward structure works
At the outset, policyholders choose their annual mileage - between 3,000 and 7,000 to start with – but can buy Top-Up miles should they need more. This enables them to pay only for the miles they need, helping them get on to the road much more affordably in the first place.
A £20 welcome bonus is paid to every customer that receives a Carrot Card at the inception of his or her policy and is paid subsequently as a reward for having their i-box installed and activated. If the policyholder improves on their Driving Style starting score, cash rewards are paid on to a Carrot prepaid MasterCard® card at the end of each quarter.
The Carrot Card enables the holder to earn cashback when used at a network of high street retailers, including Topshop, Debenhams, House of Fraser, Halfords and Zizzi – making their cash rewards go even further.
A £40 cash reward is also paid to the customer for each friend that goes on to buy a policy as a result of Carrot’s unique Facebook App
On the ethos behind the Carrot model, Ed Rochfort said "Since Carrot was first conceived our philosophy has been to build a telematics insurance product that encourages and rewards safe driving, rather than punishing poor driving. With Carrot, we’ve designed a customer experience that is all about rewards, and we feel confident that this will affect a change in behaviour, encouraging young drivers to take responsibility and drive safely, but also to enjoy the fact they are judged on individual merit.
“We’re finding that the combination of lower premiums, generous Driving Style cash rewards, refer-a-friend rewards and further cashback from our retail partners offers something really refreshing and genuinely appealing to young drivers. It is this customer satisfaction that will help us to retain our customers and build a brand that consumers like to engage with.
”Also since the EU Gender Directive came into force on 21st December 2012, we’ve noticed a significant increase in the number of policies we’re selling to young female drivers. Whilst our overall proposition is favourable to all drivers in terms of the lower premiums we're able to offer, perhaps the Carrot Card and opportunity to earn cashback at popular high street retailers hold a bit more sway amongst female drivers. Either way, we believe that the Carrot proposition is a no-brainer for all young drivers seeking a more rewarding relationship with their car insurance provider.”
To find out more visit carrotinsurance.com.