Usage-Based Insurance and Telematics
In an age of technology advancement, UBI and telematics have played an integral part when we examine the future of the auto insurance market. And UBI is quickly gaining traction, particularly among younger drivers.
UBI allows insurance carriers to monitor customer driving habits through a telematics device. This information can be collected by installing a device to a vehicle’s on‐boarding system or through pre‐installed telematics. Consumers who take part are given an accumulating discount at each renewal, normally between 5% and 30% off their premium.
By collecting this information, insurance carriers are able to analyze real-time data compared to predictive risk modeling from actuaries based on number of statistics. This allows companies to develop new products and increases auto premium pricing accuracy. So which companies are leading the charge, and are drivers receptive?