You’ve heard of FICO, a ratings system for credit scores. Now the company that puts out those scores (the analytics software firm formerly known as the Fair Isaac Company) has announced it will be rating driving skills as well.
As Tom Anderson writes for CNBC, FICO has been creating algorithms along with eDriving (a company that provides driving training) to determine the extent to which a person’s driving ability puts them at risk of a crash. FICO will test the driver score system on teens in the first few months of next year, and plans to extend it to all drivers eventually.
‘Mentor’ Finds Problems, Offers Solutions
FICO’s Safe Driving Score will be based on data it receives from eDriving’s “Mentor,” a telematics technology that records a driver’s acceleration, cornering, speeding, distraction by cell phones, and other information. In addition, FICO will provide each driver using Mentor with a tailored list of interactive training modules.
Mentor and the new FICO Safe Driving Score will help high-risk drivers understand how their driving behaviors are putting them at risk of car accidents, and will suggest ways they can manage their risk.
Celia Stokes, CEO of eDriving, says, “We are taking a Weight Watchers or FitBit approach. It’s a little bit of gamification and a little bit of shamification.”
About 400,000 new drivers are using eDriving training annually, and are eligible to have FICO score their driving skills. The two companies are creating an advisory board to help the FICO Driving Safety Score become a standard for all drivers. Automakers, insurance companies, brokers, fleet and incidental management companies, and other telematics service providers will be represented.
FICO’s Dual Role in Insurance
The Driving Safety Score is completely separate from a person’s FICO credit score. However, the FICO credit score does have a relationship to a person’s driving, as people with higher credit scores pay less for car insurance than people with fair or poor scores. For example, a person with a FICO credit score of 650 to 699 pays an average of 28 percent more for car insurance than someone with a score of 750 or higher.
Among the many commenters to the CNBC piece, Christian Hutchinson suggests that people’s livers be tested to determine their history of substance abuse. He writes that using drugs, whether prescribed or illegal, can increase a person’s risk of a crash. And someone commenting as TexasRanger writes that insurance companies ought to base their rates on a person’s driving record and the type of vehicle they are driving.
Drive Like a Girl
Nick Clements writes for Forbes that although some adults might not like that their data is being collected, there is a precedent for this type of thing in the United Kingdom. Namely, a car insurance company with the unlikely name Drive Like a Girl requires customers to install black boxes in their cars to measure how safely the person is driving, in much the same way as the FICO/eDriving system will. In the U.K., drivers with excellent driving-skill scores can earn rewards and lower insurance premiums.
Drive Like a Girl will strike some people as a questionable name. As explained in the Forbes piece, in the U.K., women have typically been safer drivers than men, but discrimination based on gender is not permitted. Thus car insurance companies there were not able to charge women lower premiums, despite their safer driving records. The company chose that name to get the message out that it would give lower premiums to anyone who is a safe driver.