Continuing to Analyse COVID-19’s Effect on Motor Exposure

Andy Goldby - April 02nd, 2020

Following on from my blog last week which started to look at the effects of the COVID-19 pandemic on motor exposure, we have undertaken further analysis looking at whether the restrictions which are being put in place by various governments are actually reducing people’s driving and if there is a knock on effect on Auto Insurance exposure.

Our latest data shows that there has been a reduction in miles driven that could lead to a reduced risk level for Auto Insurance of up to 85%, but this reduction varies significantly by country. Since the publication of our initial analysis last week, the UK entered lockdown on 24th March and South Africa began a police enforced lockdown on 27th March.

What data have we analysed?

As before, we have used summarised data from multiple clients across a number of key territories which has been aggregated to allow for a daily analysis of:

  • Active users – those who have completed a driven trip on a day
  • Trips
  • Mileage

The data covers all of March, until 28th March, and has been compared against data from the last week of February to allow for normal weekly seasonality.

Changes to miles driven

Daily Distance Driven to 28th March

The above graph also shows that Iberia started to reduce daily mileage before other countries and despite bouncing back a little, it is below 20% of usual mileage levels. The US and Germany have reduced but much more slowly, currently showing around a 40% reduction against normal volumes. 

The largest changes have been for the UK and South Africa. In the UK, there was a 30% drop on the day the lockdown was announced, now dropping to ~20% of usual volumes. In South Africa, the tighter enforcement of their lockdown resulted in a drop of 90% overnight. 

Our data is corroborated by the UK Government’s report on general transport use, where our clients’ private car mileage reduction is very similar to the reduction shown in Bus usage.

Possible causes of reduced exposure

The reduction in the number of miles driven per day could have been caused by one of three key factors:

1. Reduced miles per trip

Average Miles per Trip to 28th March

The above graph shows evidence of 40% trip length reduction in all countries except the US where trip length has only reduced by ~10%.

2. Reduced number of trips per user

Average Trips Per User to 28th March

The above graph shows the average number of trips per user has dropped by ~20% in the UK and the US, 40% in Iberia, Asia and South Africa and only 10% in Germany.

3. Reduced number of users driving

Active Users Relative to 28th March

The above graph shows the number of active users has seen the largest changes, dropping by:

  • 90% in Asia
  • 75% in South Africa
  • 60% in the UK and Iberia
  • 40% in the US

Likely effects on the insurance industry

Since the lockdowns came into effect, trips are limited to essential travel, meaning a disproportionate drop in mileage on motorways compared  to city roads. Additionally, telematics tells us that there is a strong effect on risk from the behaviours which drivers exhibit.

The graph below shows that scores are deteriorating as people are likely to be driving faster and more aggressively due to less traffic on the road. Although people are now driving at safer times of day, there appears to be an increased likelihood of people using mobile devices whilst driving, which is increasing risk. Arguably, the overall effect of this score reduction will partly offset the reduced risk of less miles being driven.

Average Driving Risk Score to 28th March

The combination of different roads and driving behaviour indicate that risk per trip may be increasing by up to 10% depending on country and this could reduce the perceived benefit of lower overall mileage.

Therefore, the overall effect on insurance profitability depends on a combination of all of these factors. As of 28th March, these are:


Country / Region

Change in Mileage Behavioural Risk Overall Risk Level vs Last week in Feb (pre lockdown)
South Africa -85% 0% 15%
Iberia -80% +5% 21%
UK -75% +10% 27%
Germany -60% +5% 41%
US -55% +5%


In light of the significant risk reductions, it is unsurprising that consumer groups in the US are calling for premium reductions and/or refunds. The COVID-19 pandemic is highly likely to have a significant impact on telematics’ potential as it allows consumers to record reduced mileage. 

At The Floow, we’re expecting to see a strong demand for Pay As You Drive policies from insurers as consumers start to demand fairer motor insurance premiums based on their actual driving behaviour, including how often they drive their vehicle.

To find out more about how this is likely to affect the insurance industry, please download the full report: The Floow Ltd – COVID-19_ The Effect on Motor Insurance – Andy Goldby – April 2020

We continue to monitor this ever-changing situation and are happy to help our current clients, and the motor insurance industry to navigate these seismic changes. In the meantime, we hope you keep well and stay safe.

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