January 5, 2006

Travelers offers hybrid car owners 10 pct discount

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, 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 big sports
utility vehicle (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

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.