When the Covid-19 lockdown was enforced in late March, millions of South Africans tucked their vehicles in for a long sleep, only being awakened for essential journeys to the supermarket or for medical reasons. As the lockdown levels reduced, more activity was permitted and there has been an increase in traffic. Although it’s not the gridlock many are used to, the roads are getting busier– an indication that the economy is coming back to life possibly? Here, BizNews creator Alec Hogg talks to Valuable Nduli, Head of Technical Marketing and the Vitality Drive engagement programme at Discovery Insure, about what South Africa’s driving routines are informing Valuable and her team about the economy.– Jarryd Neves
It’s been very interesting to track economic signs of an economy that is hopefully going to recuperate faster than the dismal expectations that people have had. One of these indications could well be just how much we are driving. Precious Nduli is Discovery Insure’s Head of Technical Marketing and the Vitality Drive engagement program.
Precious, you people have done a lot of work into tracking just how much the behaviour of motorists has actually altered over the last couple of months, beginning with the lockdown, all the levels and where we are now. First off, why did you decide to do this in the first place? What is the advantage of having the ability to track it?
As you know, we have our Vigor Drive programme, which rewards our customers for driving well. We do this by measuring how they drive through our telematics innovation. We measure numerous elements. Things like velocity, speeding, what time you drive– driving at night is more dangerous– and whether you use your cell phone while driving.
We do all of this in order to reward you, so that you are rewarded– with benefits such as up to 50?ck on your fuel invest– you can in fact reduce your danger. So there’s a direct link to insurance coverage. If you drive better, you’re a better danger from an insurance perspective. We would like to incentivise. It really speaks to the full model that you are aware from a general Discovery group viewpoint. We do the same on the drive side. So in any case, we regularly measure our clients driving behaviour.
With Covid-19 and people working from home, clearly there’s a decrease in regards to how individuals are driving. We chose to track this on a daily basis, just to give us an indicator of what is happening from an economy level. So we saw that in level five there was a reduction of over 87%in terms of the typical pre-Covid mileage that we are utilized to. We’ve viewed as the various levels of lockdown have actually relieved, there’s been an increase in regards to how individuals are driving.
We’re still not a pre-Covid levels, but it’s definitely higher than the 50%level of pre-Covid. Undoubtedly, there’s a direct effect also in terms of the rewards that we give our clients. So if people are driving less– our reward is based upon fuel– we can’t provide that fuel benefit. We’ve likewise adjusted our rewards to be able to offer them a discount or cashback, based on mileage driven.
So there’s a product vital but there’s also a higher sign. What we’ve seen is that as the opening continues– since we have both service and specific clients as well– there’s been a higher level of driving with our service insurance customers, compared to individual clients. This is likewise a favorable reflection of the opening of the economy, as our service clients are going back to activity. I think this is an encouraging sign, if you simply consider the context of South Africa and the economy. We believed that was actually an intriguing insight.
The point that you make about the cashback on fuel now being replaced by lower kilometres– has the one surpassed the other? Simply put, as people now learn that they can do a lot of their work from house, are they able to take advantage of this through driving less and paying less on their insurance?
That’s what we attempt to do. We try to respond to both. We haven’t replaced the fuel cashback discount rate. However depending upon your level of driving– if you drive anywhere under 500 km– you can get in between 15%and 25?ck for mileage driven. However if you do drive, you can still get your fuel cashback. What we have actually discovered is that the majority of people are a mix of both. There are individuals who are on the extreme side. If you are a typical important employee, you’re most likely on the extreme end and you only get your fuel cashback, because you’re driving high mileages. Those individuals who are still within 500 km can get a mix of both. Possibly they’re still investing in fuel, not at the normal pre-Covid levels, however they also take advantage of this cashback discount.
What about accidents? Have you seen a decline in those?
Yes, definitely. There is a link in between spending quality time on the roadway, along with a reduction in accidents. I think that’s across the industry. There’s definitely been a reduction in car accidents.
Just to also have a look at the behaviour of the specific type of Discovery customers. Now, we know that highly engaged members would be Diamond or Gold members. Perhaps less engaged and less likely to change their behaviour would be further down the list. Has there been distinctions in the way that these groups have reacted to lockdown in the numerous levels?
That was in fact a very intriguing insight from us. We already know that Diamond and Gold customers are the better risks. They’re Gold and Diamond due to the fact that they drive well, which means that they are a better risk from an insurance coverage point of view, as they have fewer and less serious accidents.
Read likewise: Discovery Health CEO Ryan Noach: ’13 m South Africans have had Covid-19′
What’s been intriguing is that they have actually likewise been the most compliant, from a lockdown point of view. They decreased their mileage the most. There were decreases approximately 89%at level five. We’ve seen that even with the more relaxed levels, they’re still at a lower scale, if you compare them to say that the Blue and Bronze motorists. It is rather interesting and reveals that not only are they just more conscientious drivers, they’re in fact just usually more responsible.
They likewise are more connected in understanding how they can get the cash back. I suppose. More conscious of the rewards.
Yes, our engaged customers are more conscious.
What about the Western Cape, for example. They have actually led the curve as far as the other provinces are concerned. Have you picked up anything interesting in the way that the Western Cape motorists have been reacting, provided they had a peak in Covid-19 infections long before the remainder of the country?
What we picked up is that if you compare the boost in mileage driven between level 4 and level 3, the Western Cape had a 70%increase. The next greatest boost was about 55%in the Free State or KZN. Relatively, Gauteng had a 46%boost between level 4 and level three.
So you’ll see that even though the peak was around the Western Cape, they really had a much greater boost in regards to activity or mileage driven between levels 4 and level 3. So that’s a sign that individuals were out and about a lot more than the other provinces.
What conclusions can we draw about the state of the economy from this? It’s difficult, I guess, because a lot of individuals are still working from house. Since now, they have actually discovered that they can. But is there any hope that we can draw from this, that maybe the economy hasn’t entirely collapsed and we might be moving towards the exact same type of levels that we had pre-Covid?
It’s tough to draw an absolute conclusion since individuals are working from home and we don’t understand just how much level of service they’re getting. There are favorable indicators that activity has increased and continues to increase, but we definitely are not at the pre-Covid level. Undoubtedly, that’s anticipated because not all markets are open.
Read likewise: Discovery Vigor CEO Dinesh Govender: Transforming rewards in age of Covid-19
But we continue to track this quite carefully, hoping that, at least from an economy point of view– obviously canceling all the health concerns and taking all the essential preventative measures– that activity continues to increase, particularly from a business activity viewpoint. Individuals who can stay at home, we certainly motivate them to still remain at house. That’s why we’re rewarding our clients for driving less too.
How far, for instance, is Gauteng far from the pre-Covid level?
I think we are now at around 60%of pre-Covid.
That’s not so bad. If you think about it, a lot of individuals will still be working from house. So the wheels of the economy are definitely turning again.
Yes, absolutely.
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