Precious Nduli of Discovery: What your driving tells us about Covid-19 changes

When the Covid-19 lockdown was enforced in late March, millions of South Africans tucked their cars in for a long slumber, only being awakened for essential trips to the grocery store or for medical reasons. As the lockdown levels decreased, more activity was allowed and there has been an increase in traffic. Although it’s not the gridlock many are used to, the roads are getting busier – a sign that the economy is coming back to life perhaps? Here, BizNews founder Alec Hogg talks to Precious Nduli, Head of Technical Marketing and the Vitality Drive engagement programme at Discovery Insure, about what South Africa’s driving habits are telling Precious and her team about the economy. – Jarryd Neves

It’s been very interesting to track economic indicators of an economy that is hopefully going to recover faster than the gloomy expectations that people have had. One of these indicators could well be how much we are driving. Precious Nduli is Discovery Insure’s Head of Technical Marketing and the Vitality Drive engagement programme. 

Precious, you guys have done a lot of work into tracking how much the behaviour of drivers has changed over the last few months, starting with the lockdown, all the levels and where we are now. First of all, why did you decide to do this in the first place? What is the benefit of being able to track it?

As you know, we have our Vitality Drive programme, which rewards our clients for driving well. We do this by measuring how they drive through our telematics technology. We measure various factors. Things like acceleration, 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 rewards such as up to 50% back on your fuel spend – you can actually reduce your risk. So there’s a direct link to insurance. If you drive better, you’re a better risk from an insurance perspective. Therefore, we would like to incentivise. So it really speaks to the full model that you are aware from an overall Discovery group perspective. We do the same on the drive side. So in any case, we regularly measure our clients driving behaviour.

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With Covid-19 and people working from home, obviously there’s a reduction in terms of how people are driving. So we decided to track this on a daily basis, just to give us an indication 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 normal pre-Covid mileage that we are used to. We’ve seen as the different levels of lockdown have eased, there’s been an increase in terms of how people are driving.

We’re still not a pre-Covid levels, but it’s certainly greater than the 50% level of pre-Covid. Obviously, there’s a direct impact also in terms of the rewards that we give our clients. So if people are driving less – our reward is based on fuel – we can’t give them that fuel reward. But we’ve also adjusted our rewards to be able to give them a discount or cashback, based on mileage driven.

So there’s a product imperative but there’s also a greater indication. What we’ve seen is that as the opening up continues – because we have both business and individual clients as well – there’s been a greater level of driving with our business insurance clients, compared to individual clients. This is also a positive reflection of the opening up of the economy, as our business clients are going back to activity. I think this is an encouraging indication, if you just think about the context of South Africa and the economy. We thought that was really an interesting insight. 

The point that you make about the cashback on fuel now being replaced by lower kilometres – has the one outweighed the other? In other words, as people now learn that they can do a lot of their work from home, are they able to benefit from this via driving less and paying less on their insurance?

That’s what we try to do. We try to answer both. We haven’t replaced the fuel cashback discount. But depending on your level of driving – if you drive anywhere under 500 km – you can get between 15% and 25% back for mileage driven. But if you do drive, you can still get your fuel cashback. What we’ve found is that most people are a combination of both. Then there are people who are on the extreme side. If you are a typical essential worker, you’re probably on the extreme end and you only get your fuel cashback, because you’re driving high mileages. Those people who are still within 500 km can get a combination of both. Perhaps they’re still spending on fuel, not at the normal pre-Covid levels, but they also benefit from this cashback discount.

What about accidents? Have you seen a decline in those? 

Yes, definitely. There is a link between spending time on the road, as well as a reduction in accidents. I think that’s across the industry. There’s certainly been a reduction in vehicle accidents. 

Just to also have a look at the behaviour of the individual type of Discovery clients. Now, we know that highly engaged members would be Diamond or Gold members. Perhaps less engaged and less inclined to change their behaviour would be further down the list. Has there been differences in the way that these groups have reacted to lockdown in the various levels? 

That was actually a very interesting insight from us. We already know that Diamond and Gold clients are the better risks. They’re Gold and Diamond because they drive well, which means that they are a better risk from an insurance perspective, as they have fewer and less severe accidents. 

Read also: Discovery Health CEO Ryan Noach: ‘13m South Africans have had Covid-19’

What’s been interesting is that they have also been the most compliant, from a lockdown perspective. They reduced their mileage the most. There were reductions up to 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 drivers. It is quite interesting and shows that not only are they just more conscientious drivers, they’re actually just generally more responsible.

They also are more connected in understanding how they can get the money back. I suppose. More mindful of the rewards.

Yes, our engaged clients are more mindful.

What about the Western Cape, for instance. They’ve been ahead of the curve as far as the other provinces are concerned. Have you picked up anything interesting in the way that the Western Cape drivers have been reacting, given they had a peak in Covid-19 infections long before the rest of the country?

What we picked up is that if you compare the increase in mileage driven between level four and level three, the Western Cape had a 70% increase. The next highest increase was about 55% in the Free State or KZN. Comparatively, Gauteng had a 46% increase between level four and level three.

So you’ll see that even though the peak was around the Western Cape, they actually had a much higher increase in terms of activity or mileage driven between levels four and level three. So that’s an indication that people were out and about much 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 people are still working from home. Because now, they’ve learned that they can. But is there any hope that we can draw from this, that perhaps the economy hasn’t completely collapsed and we might be moving towards the same kind of levels that we had pre-Covid?

It’s difficult to draw an absolute conclusion because people are working from home and we don’t know how much level of business they’re getting. There are positive indications that activity has increased and continues to increase, but we certainly are not at the pre-Covid level. Obviously, that’s expected because not all industries are open.

Read also: Discovery Vitality CEO Dinesh Govender: Transforming rewards in era of Covid-19

But we continue to track this quite closely, hoping that, at least from an economy perspective – obviously balancing out all the health concerns and taking all the necessary precautions – that activity continues to rise, particularly from a business activity perspective. But individuals who can stay at home, we definitely encourage them to still stay at home. That’s why we’re rewarding our clients for driving less as well. 

How far, for instance, is Gauteng away 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 people will still be working from home. So the wheels of the economy are certainly turning again.

Yes, definitely.

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