Welcome to Telanon’s blog! This is where you find in-depth discussion. If you want to start with a higher-level introduction, please visit our website first at http://www.telanon.com .
We are focused on “usage-based” or “green” car insurance for consumers. All versions give discounts for proving less-than-average driving, and some offer higher discounts for also proving safer-than-average driving. It’s called “green” because: 1) it saves many consumers money; and 2) it reduces pollution because some consumers will drive less to save more.
These policies are still quite new in the United States, even though Progressive Insurance began their first field trial named Autograph™ in Texas in 1999. They followed up with a second field trial, Tripsense™, in Minnesota, Oregon, and Michigan starting in 2004. Finally in 2008 they announced the start of their planned nationwide launch of Pay As You Drive® product MyRate®. (All trademarks identified so far are owned by Progressive.)
There had been a growing awareness of usage-based auto insurance in the industry, especially in Europe where a growing number of products were launched. However, Progressive’s MyRate announcement was the trigger in the U.S. for what many believe will be a chain-reaction of competitor product introductions. The Brookings Institute predicts waves of consumer adoption, leading eventually to most of their vehicles being covered by some form of usage-based insurance. Those that are not will belong to consumers in one of three categories: 1) higher-mileage drivers; 2) higher-risk drivers; or 3) extreme privacy advocates who won’t even allow their vehicles’ odometer readings to be taken and provided to insurers for low-mileage discounts.
Progressive has earned a reputation for disrupting their own industry with innovations that give them first-mover advantages. An earlier example was direct auto-insurance sales via their Internet website. Many competitors followed their lead, once it proved popular and profitable.
Usage-based auto insurance is shaping up to follow the same pattern. Progressive recently reported that half of the consumers they surveyed were interested in usage-based auto insurance. That’s consistent with an estimate by the Brookings Institute that nearly two-thirds of consumer vehicles should save money with usage-based policies, since they drive less than the overall average miles each year. (It’s over 50% because it involves a weighted average, and the higher-mileage vehicles drive significantly more miles than the non-weighted average.) Also, about a quarter of the consumers Progressive has offered MyRate have actually signed up.
This post is only intended as an introduction. There is much more to discuss for anyone interested in the topic. This blog is our forum for such discussions. Feel free to comment and/or suggest topics. Any comments are welcome, as long as they focus on issues and not people, and are not abusive or even irrelevant — based on our sole judgment. We not only don’t see the point in offending anyone; we also don’t want to waste your time.
We’ve mentioned Progressive above, only because their actions were largely responsible for accelerating, but not starting, the trends towards usage-based auto insurance. In future posts we will also identify other insurers and/or other types of firms in the overall auto-insurance ecosystem when our discussions touch on areas involving them.
Telanon, Inc. is a privately-owned startup based near Atlanta, GA. We are launching services related to usage-based insurance that we believe are useful to consumers as well as insurers and other organizations in the industry. We will provide more details in future posts.
Until then, you can get a good idea of our current plans by visiting our website http://www.telanon.com after it is updated a few days from now. We’ll post a notice here when it goes live, as well as on Twitter as @telanon. You can see all our public posts there at http://www.twitter.com/telanon .
We look forward to your comments and suggestions, and to our discussions.