Insurers looking to take the friction out of UBI

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After years of refining its telematics-powered usage-based insurance product, Snapshot, Progressive is looking to make it a little less nerve-racking for customers who want to see just how good they are at driving.

The company’s new Snapshot Road Test functionality allows customers to test out the analytics platform and find out what their discount could be using their smartphone only, without having to get rid of their own insurance, go through the full application process with Progressive, and install a dongle first.

“We’ve seen third-party data that says more people are open to the concept of telematics,” says Anita Miller, product development manager for Progressive. “We want to let them see if they can save before signing up so they don’t have to take the risk of canceling their other coverage first.”

The coronavirus pandemic has increased some of this curiosity, with people looking to tighten their belts financially and also take advantage of the fact that they are driving less.

“The fairness of getting rated based on your actual driving has become evident to people in the post-COVID era,” Miller adds. “Especially now that we are rating on distracted driving, we wanted to continue our goal to get the right rates to the right people.”

Progressive isn’t considering third-party partnerships for driving data, Miller says, but that tactic is another way insurers are looking to sign more people up for UBI. LexisNexis’ Telematics OnDemand is being used by Root Insurance to get driving scores instantly from opted-in connected-car drivers, such as those using GM’s OnStar platform, or similar offerings from Mitsubushi and Nissan.

Consumers who opt in are told that they can receive discounts on their insurance, participate in safe driving reward programs or tap into other services. It works for insurance carriers by giving them the driving behavior information up front and cutting out the monitoring period when a consumer comes to them.

“Regardless of where we receive the data from, it is turned into a common language,” says Adam Hudson, GM and VP of the Connected Car Team at LexisNexis. “We can deliver that set of attributes to the carriers and they can run their own analytics, or we offer our own off the shelf--there’s a lot of carriers out there that want to see a new scoring model or need help.”

Root, which is currently working to extricate the use of credit scoring in insurance, likes the idea of a clear link between the value of policyholders’ driving performance with their rate, says Tom Kuhn, director of communications for Root Insurance.

“You don’t opt in to credit scores,” Kuhn says. “With LexisNexis, our primary purpose is to get that easy consumer experience where people don’t have to go through the test drive. The more data the better, because it lets us better understand the risk.”

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Progressive Root Insurance Credit scores Telematics Usage-based insurance Mobile technology Real-time data