Auto insurers embracing a "wait and see" strategy for usage based insurance (UBI), could end up underpricing bad risks that UBI insurers will avoid, according to “Usage-Based Insurance in the North America, Europe, and South Africa: Preparing for Takeoff,” a report from Aite Group.
While UBI constitutes just 1 percent of the private auto insurance market currently, Aite projects that will increase to 10 percent by 2017 and 20 percent by 2020. More than half (56 percent) of American consumers surveyed for a previous Aite Group report said they are interested in using the technology to lower premiums, and adoption is expected to accelerate.
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