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11/09/2014 Banking Innovation

About

As the first large scale Canadian Usage Based Insurance Program, Ajusto rewards consumers for their driving behavior and provides feedback mechanism to continuously improve driving, while paving the way for a complete redesign of the car insurance business model in Canada.

Innovation presentation

Convinced by the potential of usage-based insurance programmes (UBIPs) and their positive impact for customers and insurers, Desjardins launched Ajusto in May 2013. Desjardins was the first insurer to launch such a programme on this scale in Canada.

Ajusto offers its customers a device that is easy to install and provides unique and new capabilities for precise data capture and transmission, rewards consumers for their driving behaviour and provides feedback mechanisms to continuously improve driving. Consumers can save up to 25% on premiums based on three driving habits: acceleration and hard braking, annual kilometres, and time of the day. A secure online dashboard provides individual driving attributes to help clients understand and adjust their behaviour.

To ensure Ajusto was a success and could be brought to market within 18 months, Desjardins played a major role in raising awareness of telematics in Canada and innovated internally with new agile processes and a reliance on external providers.

Having quickly become a market leader, Ajusto is having a dramatic effect on the Canadian auto insurance landscape and customer driving behaviours: two-thirds of users say they now pay more attention when accelerating and braking, and half state that they have become more careful. Desjardins expects to improve its loss ratio as more clients with positive driving behaviours self-select to enrol: the average saving of more than 10% indicates an optimal risk selection.

Desjardins is currently working on the next generation of this type of programme.

Uniqueness of the project

Three elements highlight how unique this project is:

• Scale: no other insurer had taken the risk to launch a UBIP on this scale. Desjardins’ offer has been launched in the most populous provinces and is available to all drivers

• Ease of installation: customers install the device themselves, whereas other offers require expert help

• Shared benefits: contrary to other offers where the device is plugged for a limited time to estimate the discount, Desjardins customers keep it plugged in as long as they stay with Ajusto. They can then monitor their driving behaviours and adjust them over a long-term basis.

Ajusto is a disruptor in the Canadian market and represents a new way for an insurer to interact with its customers, position itself as an innovator and make significant changes to the traditional business model.

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