Trak Global, the telematics technology business which also controls Carrot, the telematics insurance business, has signed a partnership agreement with Volkswagen Financial Services (VWFS) that takes a significant step towards the fusion of connected cars and insurance. Under the terms of the agreement, which started in April, VWFS will offer one year’s free insurance with telematics for 18-24 year old drivers who purchase a Volkswagen Polo from a Volkswagen dealership.
Nick Corrie, chief executive of both companies, hailed the agreement as a “significant’’ step forward in the race to capture the mass market via low-cost telematics products. He said: “Many insurance and automotive industry commentators believe one of the key destinations of the connected car evolution is insurance capacity being combined with ‘on board’ telematics technology to deliver mass market telematics. In principle that is what we are beginning to do with VWFS today.”
Trak Global will provide their scoring, product design and telematics technology expertise, whilst Carrot have given VWFS access to their capacity panel and will provide all the insurance administration for VWFS’s insurance brand, including telematics risk management, which has reduced accident frequency among Carrot customers by over 40%.
“We believe the triangulation between the manufacturer (embedded sensor, technology and distribution), Trak Global (scoring, data analytics and platform) and Carrot (policy administration, customer interface and risk management) will be the model for most OEM/insurance telematics partnerships in the future.”
Corrie added: “We have all the end-to-end skills VWFS need to enter the telematics market and we are tremendously excited to be their partners and together spearhead telematics insurance as it matures and disrupts the mass market. We fully intend to exploit our leadership position in this space.”
Robert Cottrell, Director of Insurance for VWFS, said: “We researched the telematics industry thoroughly and concluded Trak Global/Carrot’s unique two-tiered business, from in-house technology and product design (Trak Global), to delivering appropriately branded telematics insurance via their panel (Carrot), is the best fit for our requirements.”
He continued: “The Volkswagen Polo is a key model for us in the UK and we expect this offer to prove extremely popular for our younger customers, as they can offset the high cost of motor insurance and learn to drive safely on Britain’s roads.”