Revolut’s offer of 30% off car insurance is likely “smoke and mirrors”, a leading transport commentator has said. 

Revolut is partnering with AIG Insurance to offer car insurance and has established a waiting list on the app for potential customers ahead of the upcoming launch of the coverage.

They claim applications for the service will be carried out exclusively online and it will take less than five minutes for drivers to receive a quote.

Revolut also claims it might slash premiums further by tracking the driving abilities of users with a plug-in tracker device that monitors speeding.

‘Seen this before’

Speaking to The Pat Kenny Show transport commentator Conor Faughnan said having spent 30 years working in insurance, he was hesitant to buy into Revolut’s promise.

“I haven't seen them sell an insurance policy yet, but they're saying they could be 30% cheaper,” he said.

“I've kind of seen this before.

“There's a relatively small pool of underwriters and insurance is a funny business.

“You sell your product today and you'll find out in the course of the next seven years or so, whether you actually sold it for a profit or not.”

Mr Faughnan cited Quinn Insurance, who “arrived like the people's champions” and offered cheap premiums.

“It became evident that they were under reserving, couldn't pay the claims, and the whole edifice came shattering down,” he said.

‘Jumping into the market’

Mr Faughnan likened these cheap premium schemes to “somebody sitting on a barstool, doing figures on the back of a beer mat, concluding that the insurance companies are making a fortune and we must be able to do it cheaper than that.”

“Hopefully Revolut has done their sums,” he said.

“There's more to achieving a sustainable 30% reduction in motor insurance than just saying you're going to do it.”

MODEL CAR WITH MOTOR INSURANCE RENEWAL (Rosemary Roberts / Alamy Stock Photo)

Tracker device

Mr Faughnan said Revolut are approaching insurance from a “21st-century” perspective.

“If you want to sign up for it, they'll give you a tracker device, which you plug into the car's accessory port,” he said.

“And as the name implies, it will monitor your driving – it'll tell hub if you're speeding, how you're driving behaviour is.

“They say that if your driving is good you'll get a premium reduction that could be another 25%.

Mr Faughnan said a similar device was used by AXA Insurance in 2011.

“It all made perfect sense in theory – didn't really seem to make any difference when it came to the maturing of the claims,” he said.

“A shiny new idea that seems to be brilliant – is it going to change the world? I kind of doubt it.

“At least while they're finding out, if they jump into the Irish market with competitive premiums, it can't do us any short-term harm.

“You might have said that about Quinn at the time but long term, it did us enormous harm.”

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