Under the Hood: Pricing & Underwriting

Written by Alex Price

Published on

Under the Hood: Pricing & Underwriting

How we’re making insurance fairer

The price of insurance has become a hot topic.

Changes around the world have impacted our economy, causing costs to go up in most industries, including the insurance sector.

So, if you’ve had to renew your car or van insurance recently, chances are you’ve seen a significant increase in the cost.

We’re working to change that.

For this edition of Under The Hood, we chat with Alex Price, Zego’s Director of Pricing, to explain how we’re making the cost of insurance fairer for UK drivers.

Traditional insurance isn’t working

The problem with standard motor insurance is that it’s based on averages and statistics.

When you enter your details to get a quote, insurers use huge amounts of data to create a risk profile for you. Essentially, this tells us how likely you are to make a claim.

From the car you drive to your age and where you live, your details are compared with those of other drivers to get an idea of how risky you are to insure.

But, it doesn’t reflect how well you actually drive.

We don’t think that’s fair — in fact, we think safe drivers should pay less for their insurance.

So, we’ve come up with a better way to work out the cost of your cover.

Control and reward

So, how do we change an outdated insurance pricing model that is already established across an entire industry?

For us, it’s all about two things: control and reward.


We think drivers should be empowered to control the cost of their insurance.

Not based on national averages, but instead based on their own driving behaviours.

By sharing your driving data with us, and following our insights to practise safe and careful driving, you can prove to us that you’re a good driver. And, by doing so, reduce your risk profile.

We also want to give you the flexibility to tailor your policy to suit your needs and budget. So, rather than paying for coverages you don’t need, you can control what you’re buying.


Once you’ve proven that you’re a careful driver, you should be rewarded for it.

Let’s say you’re a 21-year-old new driver. You’ve recently passed your driving test, bought a car and you’re ready to head out on the road.

But, the insurance quotes you’ve received are all way too expensive.

That’s because, statistically, younger drivers are more likely to be involved in an accident than older, more experienced drivers. So, even though you may be really good behind the wheel, insurers can only look at the data to price your policy, which means you end up with high insurance costs.

In other words, you’re paying the price for all the bad drivers out there.

Until you’ve built up your driving history (and your no claims discount) you’re likely to be paying a lot more than you should.

But, imagine if you could show your insurer that you’re a good driver. And do so much sooner than waiting to build your driving history.

By proving that you can drive safely, you could reduce your insurance risk. And that means lower insurance costs.

Smarter insurance, fairer prices

So the next question is: how do we let people show us how well they drive?

Say hello to Zego Sense, our telematics insurance app!

Most telematics policies require you to install a black box device in your car, which then tracks where and how you drive. But, the effort and hassle of modifying your car can put drivers off.

The technology in the Zego Sense app picks up on things like acceleration, braking and cornering, and uses clever calculations to build a profile of your average driving habits over time.

But, there’s more to it than that.

To break this complicated technology down, we like to use the How, What, Where, When and Why methodology:


How you drive is one of the most important ways we can determine your risk factor. It allows us to identify the good drivers, and reward them with the best prices.


By analysing your vehicle and the way you use it, we can further enhance our view of your overall risk as a driver.


Location matters. Tracking where you drive, overlaid with location-specific risk factors such as known crash hotspots and speed limits, can help us to get an accurate view of your risk.


The time of day you tend to drive can have an affect on your risk. Rush hour, school pick-up times, open motorways or driving long hours in the dark can all add to your risk. Also, the more time you spend on the road, the higher the chances of being involved in an accident.


Do you only use your car for personal trips? Or do you also use it to earn money as a delivery or taxi driver? The reasons you use your car all add up to create your overall risk factor.

By using Zego Sense to analyse all of these factors, plus many more, we’re able to build a really clear picture of how you drive.

And, once we can see that you’re a good driver, we can reward you with better prices. So, when you drive safely, you can earn discounts on the price of your renewal.

Fairer prices, safer roads, better insurance. That makes Sense.

You can learn more about Zego Sense here. And, stay tuned to find out how we’re developing Sense even further in 2024…