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It’s been a few months since CAA launched its pay-as-you-go auto insurance offering in Ontario this July and customers that don’t get behind the wheel often are proving that they like the option to pay for their insurance in 1,000-kilometre increments. Drivers that sign up for CAA MyPace are charged a base rate, after which they pay every time they hit another 1,000 kilometres up to 9,000 kilometres when the pay-as-you-go charges are equal to what the driver pays under a standard auto insurance program. After that, the driver won’t be charged for further increments.
“People really like that choice and the ability to be in control of their premiums, but also the flexibility of putting it on that vehicle that you may not drive all the time, and not needing to worry about taking coverages off in the winter and putting them back on in the summer fits with a lot of people’s lifestyles,” said Matthew Turack, president at CAA, adding that broker education on MyPace is ongoing.
“We continue to roll it out and train brokers, and keep on-boarding new distribution agents as the months go on. We know that it’s a different product, it’s a different way of making sure consumers understand how pay-as-you-go works with auto insurance, what is the 1,000 kilometres, how does that work, and how do I see it on my app or my phone? We have to make sure we train the agents so when they sell it, they can inform the consumers.”
The auto club and insurer now has its sights set on Nova Scotia and New Brunswick, meeting with regulators, who have shown a good deal of interest in the offering, to discuss bringing MyPace to the Atlantic provinces.
“We’re providing them more details [and] we’re going to be submitting a filing on it,” said Turack. “They’ve actually been really open and receptive in bringing that to the constituents in those provinces, and PEI will be the next province to follow.”
While reforms of auto insurance continue in several provinces, and complaints about the rising costs of premiums are coming from both consumers and insurers, it was realizing the risk profile of infrequent drivers that made 2018 the right time to launch MyPace.
“We’ve seen all the news on the cost and we’ve seen consumers’ interest in wanting to pay less for auto insurance,” said Turack. “But, it wasn’t the largest variable in why we launched this product. We launched this product because our data showed us that consumers who drive less than 9,000 kilometres don’t pose a big risk in terms of the probability of them getting into a loss and therefore, they can pay less for their auto insurance, and it fits and matches to the risk they present.”
Brokers have also liked having something new to present to their clients, according to the CAA president.
“It’s innovative, so it gives them something new to talk to their clients about,” he explained. “It provides a solution that gives them the ability to talk to their client about that control and that ability to affect their premiums and how much they’re paying – and save some money potentially.”
The message of innovation is key for CAA as it reforms its own image to demonstrate that it can keep up with the times and give auto insurance customers what they want.
“While maybe traditionally [CAA] wasn’t known for being an innovative company, we’ve really worked hard on showing how we can be innovative, and how we take safety and protection very personally and make that our primary focus,” said Turack. “CAA MyPace fits into that because it really is another way for us to protect people, and it’s an innovative way. It shows how we can be creative, it shows how we can use technology, but all for the purpose of making sure that we can keep [consumers] safe.”
