Lexis-Nexis, which offers a telematics analytics platform for insurance companies, commissioned research to find out how consumers view usage-based insurance and what would spur them to adopt it. Here are some key findings, which were reported and contrasted with a 2010 survey that asked similar questions.
- Awareness of usage-based insurance has tripled since 2010. A third of consumers are now aware of the concept, mostly Progressive's Snapshot program (78% of awareness, compares to 8% for Allstate, the next highest).
- Consumers are more uncomfortable with social networks (63%) than the UBI concept (48%). While more than half reported discomfort with online banking and search engines, only a third were uncomfortable with a "program sharing information leading up to an accident to determine fault." Though there was a 7% drop in the amount of respondents who said UBI "gives too much information," consumers were more uncomfortable with information sharing overall compared to three years ago.
- Consumers value perceived control over rates highly when weighing the pros of a UBI program. They also are keen to receive discounts: 72% said they'd try it out for an automatic 10% off their premium, and 62% said they'd sign up for the potential for a 15% discount. A further 36% said they woul change carriers to sign up for a UBI program with a 10% discount.
- But because consumers sign up looking for discounts, they want to be able to opt-out without penalty. That was the highest factor that would increase UBI interest, even beating out the discount itself. Consumers also reported high interest in choosing the information that they provide, and also largely want assurances that their information is only stored for a short time (70%).
- Two-thirds of respondents with drivers age 16-25 in the household said they would sign up for UBI to get information on their younger drivers. Self-evaluation was less warmly received overall, though: while 69% indicated interest in a driving score, tips to improve that score were only valued by 56% of respondents.
- Consumers want to use their smartphones, not black boxes: 73% said it would be easier to adopt a UBI program if it used a smartphone app.
Following the research, Lexis-Nexis says that insurers who want to get into UBI should:
- Offer discounts
- Provide control over policyholder information
- Target consumers under 35
- Offer trial period with automatic discounts for trials