... and off we go!
Today, february 8th, marks the start of my university graduation research project. I am a student of environmental sciences at the University of Utrecht, the Netherlands.
I plan to investigate the value-creating potential of Pay as you drive (PAYD) vehicle insurance, which is a car insurance that is paid for in cents per mile or kilometre instead of a fixed sum per year, as is currently the case with most insurance companies.
The idea is that people who pay their insurance fees per distance traveled will more consciously weigh their options when planning a trip, leaving their car unused more, thus contributing to reductions in traffic congestion, and reductions in transport emissions and in damage-claims, both collision- and liability claims.
Congestion, traffic (exhaust) emissions and damage repair all have considerable environmental impacts, so arguably PAYD insurance is potentially a good way to use a so-called market based instrument to reduce those impacts. But in order to have it available to individual motorists, individual insurance companies will have to have it on offer. Insurance companies will be reluctant to provide the possibility to insure 'the PAYD way' when a good business case is lacking.
My research will be focused on two main questions:
1. How much environmental value can be created by the introduction of PAYD vehicle insurance in the Netherlands?
2. How much corporate value (ie, business opportunities for individual vehicle insurance companies) can be created by the introduction of PAYD by individual dutch insurance companies?
Depending on the outcome of those two questions, the remainder of the research report will be about:
- suggestions to make PAYD a more attractive product for an insurer to offer (currently, hardly any company has it on offer)
- suggestions to make PAYD more value-creating in terms of reducing environmental impacts (under those involved with the product, there seems to be a sort of consensus about two things: 1. PAYD on its own will not revolutionize traffic-related environmental impacts; 2. It might be a sensible complement to other market-based transport regulation measures, such as a 'kilometerheffing', a general tax on mobility levied by the government, an idea that is aired regularly in dutch politics but has failed to pass through parliament as legislation on several occasions).
More generally, the idea is this: a comprehensive variabilisation of the costs of individual mobility, which is a part of Dutch governmental transport policy, is an indispensable part of the transition to a more sustainable mobility.
If the two questions should yield two clear 'zero' answers, the remainder of the research report should focus on suggestions to reduce transport-related emissions in other ways.
I hope to keep myself focused, motivated and productive by the contributions to this blog, at the same time practising my English writing skills.
So, dear reader, whoever you are, do not hesitate to reprimand me (in comments, for example) in case I fail to make good progress at any time!