Most drivers participating in a recent survey are open to usage-based insurance (UBI). According to the UBI Consumer Survey from Towers Watson, 79 percent of the 7,645 respondents indicated they either would buy a UBI policy or are willing to consider the concept, and if insurers would guarantee drivers’ premiums would not rise, that percentage increased to 89 percent.
Interest in UBI programs was highest among younger drivers (18- to 34-year-olds) with 66 percent saying they would definitely or probably purchase a UBI policy. Roughly half (54 percent) of the participants who drive every day showed a strong interest in UBI.
Sixty percent of those interested in UBI programs said they would be willing to change their driving behavior, including sticking to the speed limit (71 percent), keeping a safer distance from other vehicles (52 percent) and driving more considerately (49 percent) as the leading adjustments.
“Many major auto insurers already offer UBI policies, though consumer adoption has been slower,” said Robin Harbage, global lead for Towers Watson’s UBI practice and DriveAbility service offering, which is designed to provide strategic, logistic and analytical support to enable insurers to create products that are priced according to monitored driver behaviors and help policyholders improve driving habits. “[Consumers] are beginning to realize their data can actually be helpful while lowering their monthly premiums. Drivers’ views on UBI are rapidly evolving — they are embracing the technology and making it part of their driving experience.”
The survey gauged consumers’ interest in various value-added services that can be enabled by the technology underlying UBI devices; 72 percent of those interested in UBI said they would be willing to pay for them. Drivers showed most interest in vehicle theft tracking (83 percent), automated emergency response (82 percent) and vehicle wellness reports (79 percent). “Consumers’ interest in UBI-related value-added services presents a great opportunity for insurance companies,” said Harbage. “Insurers can begin thinking about de-commoditizing their products by incorporating these services into their UBI offering. They can really cater their products to the very specific needs of the market, and if done effectively, it will lead to growth and higher retention levels.”
Towers Watson also gave respondents the chance to voice their concerns, which included insurers increasing premiums (49 percent), monitoring and tracking destinations (42 percent), sharing data (41 percent) and using data to invalidate claims (38 percent). “These are understandable but not material enough to prevent further UBI adoption. In fact, these concerns actually create possibilities for insurers to design better UBI products,” said Harbage.
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