Progressive Insurance, which owns six usage-based insurance (UBI) patents in the United States, announced that it will license that UBI-related intellectual property.
The company said licenses will be subject to the following terms:
- Term of Agreement: Commences the date license is executed through April 2022
- Waiting Period: Licensees will not rate insurance based on its customers’ driving habits prior to April 1, 2015
- Licensing Fee: Annual royalty payment equal to licensee’s countrywide Private Passenger Auto insurance direct written premiums for the most recently reported year, multiplied by two basis points (0.02 percent)
- Progressive also has the right to licensor recognition
- Application for Licensing under these terms is open through June 2013, with payments commencing with usage on or after April, 2015.
As INN has reported, one in five insurance company professionals predict usage-based insurance UBI will capture more than 50 percent of the personal auto insurance market by the year 2020, according to “Telematics/Usage-Based Insurance: A Catalyst for Change,” a research paper from Strategy Meets Action.
“We have been developing and refining our industry-leading UBI program for more than 15 years and have been awarded six patents for good reason,” said Glenn Renwick, Progressive’s president and CEO. “We previously stated our intentions to license our UBI intellectual property, and today we offer further details of our offer. We invite other companies to license our intellectual property. In the meantime, we will continue to defend our patent-protected technology rights.
According to a 15-year study of five billion real-time driving miles, driving behavior has more than twice the predictive power of any other insurance rating factor, Progressive has said.
UBI accounts for more than $1 billion in auto insurance premiums for Progressive, which has UBI programs available in 43 states and the District of Columbia.
