Insurer takes bet on hybrid owners

Travelers, 4th largest US property and casualty insurer, gives 10 percent discount to hybrid owners.

January 6, 2006; Posted: 8:29 a.m. EST (1329 GMT)

St. Paul Travelers Companies is giving a 10 percent discount to owners of hybrid autos beginning in February.

NEW YORK (Reuters) - Are tree-hugging, middle-age owners of hybrid vehicles a better risk than drivers of ordinary autos? St. Paul Travelers Companies Inc. is betting they are.

Travelers (Research), the fourth largest property and casualty insurer in the United States, is giving a 10 percent discount on auto insurance to hybrid owners beginning in February. It is the first auto insurer to implement such a discount nationwide.

"Call it 'The Gas Station Revelation,"' said Greg Toczydlowski, the Travelers executive launching the program. The idea came to him after he watched a hybrid zip in and out of a station while he was pumping gas into his SUV.

Hybrids have been popular among the environmentally conscious and those attracted to new technologies. While data is still sparse on how hybrid owners compare to other drivers, Travelers' research indicates they fall into a low-risk category historically rewarded with cheaper premiums.

Toczydlowski said he had found that drivers tend to use hybrids to commute between home and work and generally stay within speed limits, thereby reducing some of the risk associated with driving a motor vehicle.

According to Travelers, hybrid owners it insures are typically married, aged 41 to 60, with both genders represented equally.

A hybrid runs on both electricity and gas, depending upon driving conditions.

Hybrid sales have doubled every year since the first such car was offered in the United States in 1999, making it a growing submarket for insurers, with as many as 30 models planned or in production, Toczydlowski said.

Hurricane Katrina, which sent gas prices spiraling, has contributed to this trend.

"Industry experts predict that hybrids could make up nearly 15 percent of total registered vehicles within the next decade," Toczydlowski said.

As of August there were 328,157 registered hybrids, with most in California. Los Angeles topped the list for most hybrids by city, followed by San Francisco, Washington, D.C., and New York.

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