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Posted: May 28, 2013
UK Insurance Firm Uses Mobile App and Cloud Platform to Track Driving Behavior
Aviva, a leading provider of financial services worldwide, wanted to help customers save money by basing auto insurance quotes on the behavior of individual drivers instead of statistics. To better understand potential customers, Aviva needed to collect telematics data from moving vehicles, but deploying on-premises infrastructure was too costly and complex. That changed when it implemented a hybrid-cloud solution based on Windows Azure. The solution uses smartphones to collect telematics data that it stores in the cloud on Windows Azure SQL Database. It also integrates with an on-premises quote system and social media such as Facebook and Twitter. With this highly scalable, extensible and secure cloud platform, Aviva can bring innovative solutions to the marketplace with a rapid lifecycle, help customers save up to 20 percent, and reach customers through the devices they use every day.
A leading provider of insurance, savings, and investment products, Aviva serves 43 million customers worldwide. Based in London, England, the company is the largest insurer in the United Kingdom with 40,800 employees and annual revenue of £50.7 billion (US$76.8 billion).
Aviva continuously strives to offer lower rates and personalized service, and its auto insurance division is no exception. The company wanted to design an innovative pricing model that would reduce premiums for the right customers, but first it needed a better understanding of driving habits. Traditionally, car insurance premiums were determined not just by the driver’s history, but also by statistical probabilities including age and gender. Aviva sought a better approach. “We wanted to give people an individual price,” says Jason Vettraino, Application Architect at Aviva. “We didn’t want to say ‘You’re in your forties, so you must drive like my dad.’ It’s all about being able to prove that you are different from the mold that people created in the past.”
Telematics is the convergence of telecommunications and information processing, which allows information to be captured remotely. Historically, it was necessary to construct and install devices known as black boxes to gather telemetry data. It was also necessary to hire an external vendor to transfer the data, and to invest in extensive back-end infrastructure capable of storing and analyzing multiple terabytes of information. However, in today’s market, telematics devices come in all shapes and forms including the classic black box design, smart meters, and more generic devices such as satnavs and mobile phones.
Advances in consumer mobile devices and cloud computing opened up new opportunities, and Aviva realized it had alternatives to building out its data center. “Suddenly in 2012, all of the constraints we faced before had eased,” says Vettraino. “Storage and processing costs had gone down, and the power of mobile phones was amazing compared with what was available in 2004.”
A new regulation provided additional incentive. In 2004, the European Communities (EC) issued a Gender Directive that made sex discrimination illegal. However, some countries, including the UK, were allowed to use gender as a factor in deciding auto insurance risk. In practice, this meant that women were offered rates up to 50 percent lower than the premiums paid by men. That changed in December 2012 when the EC ruled that the Gender Directive would also apply to rate calculations for auto insurance. “We were eager to tell drivers not to worry about gender,” says Steve Whitby, Solutions Delivery Center Director at Aviva. “Instead, rates would be determined by how you conduct yourself in the car.”
Technology had also moved forward, and advances in consumer mobile devices and cloud computing opened up new opportunities. “Suddenly in 2012, all of the constraints we faced before had eased,” says Vettraino. “Storage and processing costs had gone down, and the power of mobile phones was amazing compared with what was available in 2004.”
So instead of building out its data center, Aviva looked for a hybrid cloud-based solution that would meet multiple requirements. The company needed a flexible, highly scalable infrastructure that would integrate with its existing, on-premises quote system as well as external, web-based services and applications running on mobile phones. It also required a secure solution that would be easy to implement and manage.