Insurance firm Admiral is said to be considering purchasing telematics-heavy insurance firm Insure The Box, presumably using some of the £200 million it hopes to raise over the next couple of months as part of a round of fundraising it announced earlier this year.
The move is a little surprising considering Admiral already has a state in the telematics game with its AppyDriver smartphone app which is created in partnership with Wunelli. It’s used it in the way many other insurers have, to offer discounted premiums to those that showed increased safety on the road when the app was in use.
It also goes counter to some of the claims made by Admiral’s CEO Henry Engelhardy, who said at the time of the fundraising announcement (via Post): “Since Admiral went public in 2004 we have been unleveraged, but we think that with a favourable market and rates that seem very reasonable, now is a good time to diversify our capital base.”
Insure the Box is an insurance company that operates a little differently to the average telematics enabled firm. It allows customers to pick a specific number of miles they can drive over the year, which if exceeded will see their premium rise. However, if they drive safely, they’ll be rewarded with increased miles. It’s been a particularly popular service with younger drivers, who are able to get insurance at a price they can afford by limiting the number of miles they drive and by sticking to times that are traditionally less dangerous.
Unlike other youth focused insurers too, Insure the Box doesn’t levy fines against its customer base nor does it limit them via curfew. Ultimately it’s able to offer massive savings to customers, averaging over £600 per person.
Admiral however, while not as limiting as some firms, is much more adult focused with a traditional business model. Expanding into more youth orientated markets (where understandably, most new drivers come from) would allow it to dramatically increase its potential customer base as well as theoretically deliver even bigger savings to its current ones, by having a more diverse and profitable portfolio.
If Admiral does go through with a purchase of Insure the Box, it won’t be the only big name telematics firm buyout in recent memory. Just recently Lexis Nexis bought out Wunelli, and Quindell did a deal with Ingenie earlier this year, showing that telematics firms are terribly hot properties at the moment and an impressive new growth industry, especially when related to insurance.
As of now however, the idea that Admiral is interested in Insure the Box is limited to rumour, as there’s been no official statement from either company about the matter.
About Insure The Box
Launched in 2010 as a telematics focused insurance provider, Insure the Box aimed its service at a niche audience, targeting young and low mileage drivers, offering them specifically low premiums by limiting the amount of time they can spend on the road and therefore lowering the risk index rating of each and every one of its customers. By logging their driving and encouraging safer driving, it can not only improve the chances of its customers avoiding accidents (and therefore claims) but it can increase their mileage while still keeping the odds of any payouts low.