Insurers can now use single database for drivers’ data

The information will help them charge fairer premiums based on risk profile, and prevent fraudulent claims.

So far, almost 60 per cent of vehicle insurers in the county have agreed to share data about insurance claims. Christopher Pike / The National

ABU DHABI // Motor insurance companies can now, for the first time, share a database on drivers’hich will enable them to distinguish between good drivers and bad and so charge lower or higher premiums.

The database will make it easier for an insurance company to determine the risk of an individual driver instead of using general parameters such as age, nationality of the driver and their driving experience.

In doing so, drivers with a history of accidents will pay a higher premium than careful drivers. accident histories which can help them to charge fairer premiums based on risk profile, prevent fraudulent claims and lead to safer roads, experts say.

The data system, developed by eData Management Solution in Dubai, has been welcomed by insurance companies all over the country.

Fareed Lutfi, secretary-general of the Emirates Insurance Association, said: “Good drivers were subsidising the bad drivers and this was a big problem.”

Mr Lutfi, who has 33 years experience in the insurance industry, added: “I paid more than the person who had bad accidents.”

He said that previously, if a driver had a bad accident, the insurance premium would go up. Then the driver would just change his insurance company who would charge him a good premium without doing any background checks.

“But with a shared database, that data will be available to insurance companies,” he said.

Pascal Persoon, chief executive of eData Management Solutions, said: “Almost all of the countries in the world already have a shared database. This is considered a first in the UAE.”

Of the 62 insurance companies in the UAE, 35 offer motor insurance. So far about 20 of those companies have agreed to share data. The process involves preparing and issuing data, and testing systems before it goes live.

Mr Persoon’s company has signed a data-exchange contract with Dubai’s Roads and Transport Authority (RTA), which covers the verification of the driving licence and the vehicle identification number. These are now in the shared database.

“We receive the claims information directly from the insurance companies,” Mr Persoon said. “We expect all insurance companies to join, given the mandatory request from the RTA and the willingness to contribute to safer roads.”

Ahmed Hashim Bahrozyan, chief executive of the RTA's Licensing Agency, said the data-exchange contract would greatly benefit his agency, particularly in the annual vehicle testing and inspection for light and heavy vehicles.

“It would help us find out what accidents the vehicles had been involved in and understand what kind of repair has been done to the vehicles,” he said. “Some garages are good at hiding defects and an inspector might miss any defect which may itself be a safety issue on the vehicle.

“The information provided by insurance companies will be vital to us because they record all the details of the accidents and what has been fixed.”

Data will also enable insurance companies to reduce the exposure to fraudulent claims, Mr Persoon said.

“All data is matched towards claims and recurring claims by chassis number and driver licence,” he said. “A fraudulent driver issuing a total loss claim will be spotted within three seconds.”

The data delivers information to the Government, enabling it to identify drivers with their accident histories and vehicle repair reports so that they can ask for additional tests if this vehicle was involved in a serious crash.

Fawaz Moukayed, chief executive officer of Guardian Insurance Brokers, said all insurance-related matters should be handled solely by the UAE Insurance Authority.

“It cannot be outsourced,” he said. “It should be centralised in the Insurance Authority or with its consent or approval.”

It should also be made mandatory for a policyholder to get a claims-free record from the previous insurer before shifting to another insurer, he added.

“Without such a law from the Insurance Authority, nobody will apply it,” he said.