Progressive has reached its first licensing agreement for usage-based insurance with USAA, half a year after the terms were initially announced.
“We have found that key driving behaviors predict the likelihood of a claim far better than traditional insurance rating variables alone,” said John Sauerland, Progressive Personal Lines Group President. “As insurers realize the benefits UBI offers consumers, it’s critical they deliver programs that reflect responsible intellectual property practices, which includes licensing the appropriate IP.”
Under the terms of the agreement, the license runs through April 2022. USAA will not rate insurance based on its customers' driving habits prior to April 1, 2015. The annual royalty payment is equal to licensee’s countrywide Private Passenger Auto insurance direct written premiums for the most recently reported year, multiplied by .02%.
Nathan Golia is senior editor of Insurance & Technology. He joined the publication in 2010 as associate editor and covers all aspects of the nexus between insurance and information technology, including mobility, distribution, core systems, customer interaction, and risk ... View Full Bio