Concerns over UBI information sharing beginning to thaw

A recent study shows that consumer concerns over telematics devices and usage-based insurance programs sharing too much information are beginning to wane.

Risk Management News

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A recent study shows that consumer concerns over telematics devices and usage-based insurance programs sharing too much information are beginning to wane.

LexisNexis Risk Solutions recently released results of a survey in which more than two-thirds of respondents expressed concerns that telematics vehicle technology could give their insurance carrier too much information – a high percentage, but down from three-quarters from only four years ago.

When asked about "perceived barriers" to adopting usage-based auto insurance (UBI), 68 per cent of consumers said it would give their insurance company "too much information." However, when the same survey was done in 2013, 70 per cent had expressed the same concern, down from 77 per cent in 2010.

"As consumers become more familiar with UBI," states the study, "they are increasingly likely to perceive UBI programs as appealing and relevant, and it appears that some barriers are beginning to subside."

While some insurers, like Desjardins, are at the forefront of introducing telematics, other companies like Economical Mutual Insurance Company have taken a wait-and-see approach.

“At Economical, we have taken a different position than many in the industry on telematics,” Economical's president and CEO Karen Gavan, told Insurance Business. “While we have closely studied it and continue to monitor it, and are ready to move, we’re not pushing it forward at this time because we think the technology is changing so rapidly and its adoption is probably going to be driven by things much broader than the cost of insurance.”

Sylvie Paquette, president and chief operating officer of Desjardins says that “more than 50,000 ‘mostly new clients’ have registered for DGIG’s usage-based auto insurance programs since they were launched in May 2013.” (continued.)
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LexisNexis, a unit of Reed Elsevier plc, commissioned surveys of both consumer auto policyholders and commercial policy decision makers coordinating vehicle fleets.

In personal lines, 38 per cent of respondents said they were aware of UBI programs, and 18 per cent “are projected to adopt UBI for a 10 percent discount off their insurance premium,” states the survey, which was conducted by a third party.

The consumer respondents were insured drivers between the ages of 25 and 74, while in commercial lines, 409 managers of fleets comprising 2 to 20 vehicles were surveyed.

UBI “currently accounts for” 2 per cent of personal lines auto insurance policies in the United States, LexisNexis said, adding that within five years, However, UBI policies “are projected to capture” 20 to 30 per cent of the market.



 

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