While the telematics capabilities that enable auto insurers to track mileage and driving behaviors continue to advance, Usage-Based Insurance (UBI) has  potentially been slow to gain traction among consumers. In keeping with our mission of working with Members to design the best possible insurance products, AAIS recently went direct to consumers to understand the reservations that may be stalling adoption of UBI products and strategies to overcome these obstacles.

In early 2022, AAIS sent a 10-question anonymous online survey to a cohort of adults in the US. The survey generated 565 responses from consumers who purchase or plan to purchase auto insurance. Our findings focus on the respondents that do not yet have UBI[1]. Among the key findings:

  • Although a minority (17%) of respondents indicated they are likely to purchase UBI, these “Acceptors” present a growing opportunity to carriers.
  • The middle ground of respondents, undecided on UBI (38%), pointed to three factors as being important in influencing their likelihood of purchasing UBI. These included the right to determine data access (74%), the right to privacy (49%), and rights to data rectification (33%).
  • “Detractors” are those respondents indicating that they are unlikely to purchase UBI (45% of those surveyed). Their greatest concerns surround data, from ownership of telematic data (50%), to fair use of telematic data (50%), to transparency of telematic data use (49%).
  • Respondents in older age groups, who view themselves as better-than-average drivers, were more likely to be among the “acceptors” of UBI to reduce insurance premiums.

The complete findings from the AAIS survey, including additional industry research and data on markets currently offering some form of UBI auto insurance for consumers, is available in our new AAIS Consumer Report: Auto Insurance 2022.

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[1] While the data collection and sample size limit drawing significant conclusions, they do paint a clearer picture of the importance attached to certain factors motivating, or demotivating, uptake of UBI in the consumer auto sector.

Written by Ash Naik
Ash Naik is AAIS Product Manager for Commercial and Personal Auto. Ash is an experienced software product manager, having worked at Microsoft and Dell before entering the start-up landscape as Cofounder and CEO of SalesPal and Mandovi, developing a long history of shipping high-quality, cutting-edge technology products that enable digital transformation in IT infrastructure and application infrastructure. Ash brings his passion for products, packaging, and experience design from the technology sector to the insurance industry. He has a Master of Business Administration (MBA) in Marketing and Entrepreneurship from the University of Washington Foster School of Business, and mentors first year MBA students looking to make a career in the technology space. He looks forward to helping AAIS Members meet the challenges in the auto insurance market.

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