—– Original Message —–

From: Salvador Minguijon

To: Salvador Minguijon

Sent: Friday, March 30, 2007 1:50 PM

Subject: “Pay As You Drive” Information

Dear Ladies and Gentlemen: 

There has been a lot of activity in Germany with regard to the project “Pay as you drive” during this month.

I try to look for the English versions of the documents that I use in my references, but this is not always possible. Although I suppose that it is better to have located this documentation in German than to ignore it.

The most important news is that there is an agreement between IBM and Allianz to develop the project at European level.

We all know that IBM has been working for years in this project and that its collaboration first with Norwich and later on with Cert, has allowed him to dedicate a very superior quantity of resources than the rest of its competitors. However, the sudden interest of Allianz in this project has surprised me.

Also with European objectives we have the projects of Siemens with Zürich Versicherung and T-System with WGV. All with the enough capacity to develop this project. 

A special case is Swiss-Re that, together with Norwich Union, are the insurance companies with more motivation in this project and this compensates in great way its difficulty to manage technical projects.

I imagine that Axa-Winterthur, eternal competitor of Allianz, will redefine his strategy with regard to this project immediately, in fact their North American branch Unigard has thrown an investigation project with a budget of 6 million dollars, a third of which are federal founds.

 I suppose that these companies will establish one or two projects at European level, which will be the ones that definitely will be implanted. The rest of the companies, with local project, such as Sara, Unipol, Uniqa and Huk-Corbug will finish adding to these projects.

In great way, what will happen depends on the result of the auction of the patent EP0700009 that is something like a ticket to be able to participate in this project. This ticket allows you to ascend to this train, called PAYD, but you have to make the effort of being in the station, at the correct time and in the correct train. In this train there are few seats, so if you don’t have ticket, you will have to fight to go up to it, and have luck, because many travelers will stay in the station.

 It doesn’t seem that Norwich has any intention of informing us of how its project is developing. We can only sense it for the euphoric presentation of results of its supplier Trafficmaster, not bad if we remind that the project began commercially in September of 2006. 

Regarding Progressive’s Tripsense project in USA, has announced to wide their tests to the states of Michigan and Oregon, it is necessary to remember that he has already made some small tests in Minnesota, using very low cost equipment, with open software and that doesn’t need installation. It is the most economic way to make some tests, although if the project gets in a commercial phase, a more specific equipment would be designed.

There are new informative publications of the project that have a great interest:  http://www.ptv.de/download/mobility/hintergruende/PayAsYouDrive.pdf

http://www.sbd.co.uk/assets/Future_Trends_NEWS_release.doc 

http://en.wikipedia.org/wiki/PAYD

http://www.vtpi.org/dbvi.pdf

http://www.ivw.unisg.ch/org/ivw/web.nsf/SysWebRessources/FT4-Helvetia/$FILE/Helvetia.pdf

http://www.lexisnexis.de/aktuelles/112115?or=13&ur=0&tt=news

http://www.businessportal24.com/de/Kfz_Versicherer_Verdraengungswettbewerb_Massnahmenbuendel_Marktposition_158341.html

https://payasyoudrive.wordpress.com/2007/03/22/the-endless-crisis-in-the-automobile-insurance/ 

It is also interesting the publication of the University of Cambridge that list projects that are linked with this in great way, the interest raised in the sector of rent-a-car, in companies of services, technology or countries like Korea or India.

I have upgraded my database Pay as you drive directory .
 

If somebody wants that their address is erased of my distribution list, please return me this message with the word “DELETE.”
 
Yours sincerelly.
 
 
                                                                      
Salvador Minguijon Perez.     

The endless crisis in the automobile insurance.

My experience in Spain, which I suppose is applicable to the rest of the countries of Europe and USA, is that the sector of the automobile insurance suffers a problem of uncertainty for about 15 years.    The repairs of the vehicles are more and more expensive because the technology is more and more complex, the manpower get more expensive too and the constant renovation of models influences very negatively on the cost of the spare parts. On the other hand, the amount of the compensations presents an unstoppable growth.    The consequence of all this is that the insurance policies are more and more expensive.    In a beginnig this is very positive thing for the sector, because it allows a bigger business volume and consequently the possibility of obtaining more benefits. The problem is that the permanent ascent in the costs implies a continuous adaptation of taxes that are not acceptable in the market.  On the other hand the guarantees of these policies are closely regulated, watched over and guaranteed by the own State. For this, it is very difficult to compete being based on the credibility and the trust, factors that traditionally were the key element of differentiation in the insurance marketing.    The traditional channels of sale, based on the personal relationships, have been obsolete; it is a too expensive product to sell it in this way.    The transparency of the market has increased, due to the existent easiness to obtain different offers and to be able to compare them using quick communication systems as the telephone or internet. This implies that the price is now unquestionably the main sale factor.      If we apply to this situation the pattern that Mcgahan proposes in its “Four Trajectories of Industry Change” we would see that our core assets are in danger and that therefore the sector is in a phase of “Creative” adaptation.    Until some years ago, it was assumed that the insurance companies could not influence in the risk of their clients, they limited to try to be guided to some markets with some certain characteristics and to defend their market by reducing their commercial or administration expenses or to fight to maintain an image of extraordinary service.    Those that opted for the first option are the “direct” insurance companies (Directline), creating a managerial concept that has spread in other sectors with the name of low cost activities.  But at the end there have been very few the companies able to stay in this market with a stable and reasonable margin of benefits. They have become a sector of specialized companies that have been able to adapt to work in a changing environment, at least for what is normal in the sector of the insurance in general.      But now the thing complicates much more, we have tools that allow us to influence in the risk of our clients and the handling of these tools have never been the nucleus of the activities of insurance companies. We would have entered in a phase of “Radical” change since as much our core assets as our core activities would have been obsolete.    In these cases Mcgahan recommends us to have a short term strategy, with an extreme supervision of the activities in the market, identifying it is the sector of the market that we can defend more easily.    My opinion is that in the market a system “Pay as you drive” will be imposed, just because it doesn’t seem that there is another alternative option that presents a similar compatibility with other big social problems that are demanding solutions in an urgent way. And although we will really have to wait to see how, when and who participates in this reorganization of the market, the truth is that nowadays we have tools that allow to make us an idea of how the events will evolve, a good reflection base is the studies of Christensen on the “Disruptive Innovation” and those of Rogers, about on the “Innovation Adoption Curve”.

—– Original Message —–

From: Salvador Minguijon

To: Salvador Minguijon

Sent: Friday, March 16, 2007 11:30 AM

Subject: “Pay as you drive” Information

Dear Ladies and Gentlemen: 

The Victoria Transport Policy Institute has revised the document Pay-As-You-Drive Vehicle Insurance, which is without any doubt the most complete study that exists on this topic and, of course, I recommend reading it again.    Insurance Australia Group (IAG) chief executive Michael Hawker, exposes his vision about this project that is not very different from what we had already exposed in the article Strategic Positioning of the Insurance Companies regarding the projects “Pay As You Drive”. 

If a month ago I underlined the errors of Wikipedia relating to the Patent EP0700009, this month I take back because the information that is in the epigraph Insurance Patent is concise and correct. When trying to look for the person that has published this information I found NOWA. I suppose that in fact it will be Marc Nowotarski, one of the few specialists in the application of patents in the sector of the insurance.    Such as I advanced last month, the rights of the European patent that are still of my property, that is to say in Italy, Spain, France and Germany, although in the last three countries there is granted an nonexclusive license, will be jointly auctioned next day May 15 in Munich by the company IP Auctions GmbH. It is still possible that some country is retired of the auction.  

The auction of the patent has some very concrete motivations, but I am convinced that will favour the development of this project. Some great insurance company has manifested a certain relief, because they thought that the property of the patent would pass to a great technological company and that consequently it could not be used aggressively by their competitors. I am not so sure of this, the range of companies that are looking at this project is very wide and with very different interests. 

Besides the interests of the insurance own companies (in Europe) and of the users (in
United States), there are two problems of great importance pushing this project, one of them is the congestion of the traffic and the other one the climatic change. For instance, it doesn’t seem that nobody worries too much of the 30,000 annual deaths that originates the traffic in
Europe.     Regarding the first one, I believe that Tony Blair’s answer to the popular rejection to the project Road Charge represents the position of all the governments of the industrialized and democratic countries, in opinion of some, too fearful of losing votes.    But contrarily to what is usually thought, it is not that the public transportations absorb the decrease of the private traffic, that would be practically impossible, but of conjugating this with a smaller use of the vehicle, something that will have many repercussions in the organization and forms of life of our cities.    If some wants to deepen more in the topic of the congestion of the traffic, I recommend you the following mail list http://lists.umn.edu/cgi-bin/wa?A0=con-pric.  

 

           I have upgraded my database Pay as you drive directory .
 
            If somebody wants that their address is erased of my distribution list, please return me this message with the word “DELETE.”
 
Yours sincerely.
 
 
                                                                       Salvador Minguijon Perez.   

Auction of the patent EP0700009, well-known as “Pay As You Drive” or PAYD.

I have dedicated 15 years to the “Pay As You Drive” project conception and I would have prefer to have the possibility to participate in the election of the companies that had to execute it in
Europe. 

Although I must also recognize that indeed I had this opportunity. I had the absolute trust in the team formed by Norwich Union, IBM and Progressive. It was the best in options not to develop the project at European level but at world level.    Due to different reasons, possibly worthy of a deeper study, this project was not developed as it was foreseen and Norwich Union had to restrict the aspirations to a local market.   

I would have liked to have a second opportunity to participate in the formation of another team, but the project had already created too many expectations, several companies had dedicated too many efforts in this market. In general, an enormous tension was found in all the involved companies, a tension motivated by the development of the technology companies and the lack of decision of the insurance companies that saw in the project too many uncertainties.    This evolution had the danger that at the end several projects were developed almost simultaneously and that the defence of the rights of the patent would be very complicated, practically impossible for a private person.   

This is the reason for which I have decided to offer it in an auction.    I would like this patent to complete the objective for which it was requested, that is to protect the efforts that the company acquirer will have to carry out for its commercial development.    I would also like the protection of this patent to give to this company the enough security to use in a shortly term the possibilities that offers this system to influence in the conduction habits and to reduce the risk of the users.    This is a not very commercial aspect of the project, but for social responsibility and for the own concept of what a patent is, it is a social debt that should not be omitted. It is comprehensible that at this time no company dares to outline this very openly, but it is quite shocking that some companies use the lack of this function to try to avoid the rights of the patent.