Today’s drivers ask themselves the questions: “How does my driving behaviour affect my insurance costs? Do they depend on my age, type of car or driving habits?”. These doubts appear because of the tendency of insurers to shift to new rating approaches.
In the vehicle insurance sector, the “bonus-malus” merit-rating system, that penalizes at-fault accidents and rewards “no-claim” performance, is being replaced by UsageBased Insurance (UBI) also known as:


– Pay as you drive (PAYD),

– Pay how you drive (PHYD), and

– Mile-based auto insurance.


This type of vehicle insurance bases the rate on the type of vehicle used, measured against time, distance, behaviour on the road and place.

In order to understand how UBI will replace the Bonus Malus System (BMS), we will have a better look at the latter. Most BMS divide drivers by classes, where each class has its own discount or surcharge that is applied to the basic premium. The elements used for classification are drivers’ profile, car’s horsepower and at-fault claims. This rate calculation takes into account the historical claim pattern rather than present patterns of behaviour.


However, the need for the personalized services grows every day:

“It is expected that these traditional methods of risk assessment will become obsolete. Your car usage and your driver abilities can be better assessed based on telematics data collected, such as: the distance driven, the time of day, how long you have been driving, the location, the speed, harsh or smooth braking, aggressive acceleration or deceleration, your cornering and parking skills […] This high dimensional data, collected on the fly, will force pricing actuaries to change their current practice” (Roel Verbelen, The safer you drive, the less you pay)

We, at Freeedrive, are developing a new statistical model to adequately set premiums based on individual driving habits instead of the risk associated to the attributed class. With the increased fairness, reduced cross-subsidization and improved customer segmentation, insurers will be able to dynamically align insurance policies with actual risks.

The Freeedrive application offers a tool for insurers to gather data and get insights into the driving habits. Our UBI scoring/classification will be based on smartphone distractions and driving behaviour. Apart from giving actionable insights, Freeedrive will also encourage safer driving, leading to improved road safety and reduced accidentality by giving positive and negative feedback to drivers.

The benefits for the insurer are improved customer segmentation and better risk management. For the drivers the benefits are cost-savings for responsible drivers in terms of insurance premium and safer driving behaviour through gamification.

Implementing Freeedrive as a tool to encourage safer driving behaviour and to gather more data on the fleet driving habits, insurers can offer the solution at reduced price and (in the future) as a part of their standard insurance package.


Interested in a road safety solution?

Send us an email on or call on +32475205767.