TOKYO -- Sompo Japan Nipponkoa Insurance will introduce a type of automobile policy this year that offers discounts based on driving data captured by a smartphone app. So-called telematics insurance policies are more prevalent in Europe and the U.S. than in Japan, where driver ratings based on accident history determine premiums. Sompo Japan's mobile app Smiling Road lets drivers know how safely they are operating the vehicle. Certain smartphone functions capture sudden braking, sharp turns and other behavior behind the wheel. The data is then quantified to provide ratings. As of October, the app had more than 100,000 users. The company will employ the massive amount of data collected through this service to offer premium discounts to new subscribers. Targeted demographics include young drivers who have yet to buy their own cars. An individual could download the app and record about 10 hours of driving using a rented or car-sharing vehicle. The person then could receive up to a 20% discount on premiums when buying a vehicle and signing up with Sompo Japan for insurance. The savings could reach about 40,000 yen ($359) yearly. Young people in Japan are increasingly indifferent to cars. Sompo Japan hopes this discount will appeal to the younger generation, which tends to be more sensitive to cost. Those buying a second car would qualify for the discount as well. More than 90% of drivers in Japan renew insurance contracts, sticking with the same insurer. To prevent fraud such as recording driving data while taking a taxi ride, the Sompo Holdings unit will use proprietary technology to verify whether the data matches the individual based on driving behavior. Sony Assurance and Yahoo Japan will start joint research this spring on insurance that uses driving data collected via Yahoo's free car navigation app. Tailoring premiums to individuals based on "big data" analysis has become a trend. Dai-ichi Life Insurance plans to develop medical insurance that offers lower premiums to healthy people, in collaboration with NTT Data and consulting company Accenture. (Nikkei)
A Sompo Japan Nipponkoa Insurance policy that will offer drivers discounts for safer driving is to become the latest entrant to Japan's nascent telematics-led motor insurance sector. The company will issue policyholders with a smartphone app called Smiling Road that can monitor how they drive and will price insurance accordingly, with the best drivers receiving a discount of 20% when buying a car. The product is aimed mostly at younger drivers who don't yet own a car. The app already has more than 100,000 users.