Privacy concerns are taking a backseat
Telematics, the wireless communication systems that can track driving habits, locations, gasoline consumption and more, are making a big impact in insurance rates. The benefits and savings telematics provide in usage-based insurance (UBI) are apparently overriding many of the concerns drivers may have over privacy issues.
Fleet managers look primarily to UBI for savings on insurance premiums, but individual drivers are using them for both savings and safety issues. Below are some of the findings in a 2014 telematics study by LexisNexis Insurance:
- There’s has been a 12 percent increase in parents tracking teens’ locations and driving habits since 2013.
- Of those surveyed, 45 percent were more likely to purchase UBI to obtain information on the driving habits of someone else in their household.
- 2013 saw a 6 percent increase in UBI interest for the safety-related features, such as emergency roadside service, automatic crash response and tracking and recovery of stolen vehicles.
- Cutting commercial auto insurance costs was considered extremely important to 75 percent of fleet managers surveyed.
- The comfort level consumers have in sharing personal UBI driving data is about on par with their comfort level sharing online banking information.
UBI traditionally uses a small device installed under the dashboard. However, interest in mobile UBI showed a 5% increase from 2013 to 2014. According to the survey, 80 percent of those owning smartphones said they would be comfortable downloading UBI apps onto their smartphones to monitor their driving behaviors. Commercial fleet managers are showing interest in mobile UBI technology, which isn’t surprising given 73 percent of their drivers have smartphones.
Approximately 80 percent of the survey participants said they would buy or consider buying a UBI policy. On the flip side, almost 50 percent of survey respondents said that they would not be comfortable if UBI programs resulted in higher premiums. Most insurers will continue offering discounts based on telematic information, not adding surcharges, according to Robin Harbage of the professional services company Towers Watson.
Source: “Usage-Based Insurance,” insurancejournal.com. 05 Sept. 2014