Throughout my career, I've spent a lot of time thinking and talking about how insurers assess risk. The industry has made significant strides in using data and analytics to make pricing more accurate and personalized. What's discussed less often is how those pricing decisions are communicated to customers.
As the industry continues to improve pricing accuracy, an equally important and often overlooked challenge remains: pricing confidence. Drivers want to understand why they pay what they pay and whether their premium reflects
In a November 2025
Carriers can close this confidence gap by using driving
How driving behavior data closes the gap
Traditional rating factors such as age, location, vehicle type, driving history and prior claims remain an important part of how insurers assess risk. But while they help estimate the likelihood and potential cost of a claim based on historical patterns, they don't show how an individual driver actually behaves behind the wheel.
Driving behavior data helps close that gap. With a driver's informed consent, mobile telematics can use smartphone sensors to measure behaviors such as speeding, hard braking, and phone use.
For example, an insurer might find that a driver who appears higher-risk based on a traditional factor actually demonstrates consistently safe behavior behind the wheel, giving the company additional information to consider when assessing and pricing that risk.
Drivers surveyed by Arity express a willingness to share driving data when they're offered something tangible in return. A majority said they would choose to enroll in an insurance program if it helped them save money, earn rewards, or get more accurate behavior-based pricing.
That creates value for both insurers and policyholders.
For insurers, driving behavior data can support more informed pricing and underwriting by providing a better picture of individual risk. For policyholders, it can help make pricing feel more closely connected to how they actually drive — provided they understand how their data is being used and what they receive in return.
How carriers can earn trust through driving data
Personalization only works when policyholders trust the process behind it.
Arity research shows that drivers see real value in behavior-based pricing, but they still have questions about privacy, how their data will be used, and whether sharing it will lead to a tangible benefit. Here's what carriers should keep in mind:
1. Be transparent about what you collect and why
More than half, 52%, of respondents said they don't trust insurers' data privacy and security, highlighting the need for clear communication about how driving data is collected, used, and protected. You should explain which driving behaviors are being measured, how that information factors into your assessment of risk, and how it may affect what your policyholders pay.
2. Give customers a say in how their data is used
It's important to make consent clear with options for participation and data sharing. Notably, 44% of respondents worry their driving data will be shared without their consent, reinforcing the importance of clear communication and consent about how that data may be shared.
3. Make the value exchange obvious
Be specific about what drivers stand to gain from sharing their data, such as more individualized pricing or useful feedback about their driving. More than half, 53%, said they want driving behavior data used to access rewards and discounts for safe driving.
Turning data into confidence
Driving behavior data can make insurance pricing feel more connected to how someone actually drives. The key is making the connection visible to drivers.
As insurers incorporate more of this data into pricing, policyholders need a better understanding of what influences their rate and how their actions behind the wheel factor into what they pay. That transparency can give them greater confidence in how their rate is determined while helping insurers build stronger, longer-lasting customer relationships.
I've watched the industry improve how it assesses risk, but it's become increasingly clear that calculating the right rate is only half the challenge. The other half is helping drivers understand and trust the outcome.
Building confidence won't solve every problem, but it can help strengthen trust in the value of coverage itself.
