Traditionally, auto insurance policies have been based on driver characteristics like demographics, personal information and history. With the emergence of usage-based insurance (UBI), insurers have started to incorporate driving behavior data such as speed, hard braking and other contextual factors.
As drivers become more aware of the benefits of advanced safety and connectivity features in new cars, this creates new opportunities for automakers to partner with insurers to increase adoption of UBI and other telematics-driven offerings.
“Automakers and insurers are in a rare relationship in which they share virtually all of their customers – all auto owners (except those who are uninsured) have auto insurance, and all auto insurance policyholders own vehicles,” said David Lukens, director of telematics at LexisNexis. “By sharing information about these shared customers, insurers and automakers can enhance their relationships with the customer and drive a better overall car ownership experience.
“There are many facets of vehicle ownership that impact both the automaker and the insurer, such as: vehicle condition, unaddressed recall and maintenance issues and vehicle ownership patterns. The original equipment manufacturer (OEM) and insurers can work together to ensure that their customers are operating their vehicles in the safest and most cost-effective manner.”
Despite the clear advantages of connected vehicles, the 2017 LexisNexis Telematics Usage-Based Insurance Study found that only 15% of consumers seek out ADAS and only 19% seek out connected car features when car shopping.
But regardless of whether a driver purchases a vehicle for its specific features, the survey found that 76% of ADAS car owners and 65% of connected car owners had a more favourable opinion of ADAS and connected cars after personally experiencing the features in their car.
“Consumers seek out products and services that make their lives easier, safer and add value, so drivers are ready for and desire connectivity in their vehicles, and they are even willing to share their driving information because they see the value that ADAS and connectivity can deliver,” said Pavan Mathew, director of OEM at LexisNexis Risk Solutions.
“The study revealed that the more engaged consumers are with ADAS and connectivity, the more favourable their opinions of UBI. Working together, insurers can leverage this attitude shift to drive UBI adoption while automakers can use the information to develop more valuable products and services that their customers want.”
You've reached your limit - Register for free now for unlimited access
To read the full story, and get unlimited access to Insurance Business website content, just register for free now. GET STARTED HERE
Already a website member? Log in below.