Allstate getting even more granular with Milewise UBI program
Allstate continues to explore several avenues for usage-based insurance. The company’s major efforts fall into two brands: the more traditional Drivewise, which appends to a traditional policy and offers discounts based on driving habits; and the newer Milewise, which uses the technology to charge a per-mile rate based on driving use.
Milewise’s per-mile rate is generally deduced based on driving habits, and can change every month. In Arizona, Allstate is piloting an even more rapid response to improved driving habits: Rates can be adjusted every week.
“Both of the programs stem from the telematics data and the analytics that allstate has behind them, and both are contributing to safer drivers in general,” says Allstate SVP Ginger Purgatorio. “With MIlewise, the customer’s behavior impacts the weekly per-mile rate, and now the customer can observe their behavior and get a immediate reaction to behavioral changes” in the form of a new rate, she says.
Milewise is live in 14 states, with Arizona being the only one where the weekly changes are being tested. The program requires the installation of an OBD-II dongle to gather driving data, while Drivewise can be run from a mobile device.
“For Milewise, we find it necessary for the per-mile charges to have the information coming directly from the car,” Purgatorio says. “For Drivewise we have moved away from the dongle approach.”
Allstate is learning more than just driving habits from its UBI initiatives. Initially, for Milewise, “we had the younger urban millennial in mind, but we’ve seen some relatively good success with retirees or people who work from home and happen to not drive as much,” Purgatorio says.
Getting a wide range of market impact information is helpful in gaining approval for innovative product ideas from departments of insurance, Purgatorio says.
“Telematics, in general, is viewed as more fair to a customers, eventually moving away from proxies that the industry has used to develop premiums,” she says. “We have had several conversations with departments ahead of filing, getting feedback before we actually file. They have come along as companies have proved that the data has merit and is predictable.”