What Do Customers Think of Usage Based Insurance? 3 New Takeaways
According to a recent Towers Watson survey, there are almost twice as many people using usage based insurance (UBI) today as there were just 17 months ago.
In February 2013, the number of consumers that had tried UBI was 4.5%. This July, it’s up to 8.5%. So what else do we know about consumer opinion on usage based insurance?
The Survey Speaks: 3 Takeaways
- Even consumers who haven’t tried UBI yet are interested. Of the 1,000 people who responded, the majority (79%) said they were ready to take the plunge with usage based insurance – and if not quite ready, they were certainly open to the idea.
When asked how their answer might change if they knew for a fact that UBI would not raise their current premium, that number – 79% – quickly spiked to 88%.
- They’re less concerned than they used to be about privacy. Only 35% of consumers surveyed said they were still worried about UBI and privacy, down from 42% last year.
- Their biggest concern now: will it cost more, or less? While concerns about privacy fade, your customers do need some reassurance regarding cost. Almost half of those surveyed (48%) worry that the usage based insurance model would end up raising their bill.
When that concern is alleviated, however, enthusiasm returns.
There’s an easy answer to this. Offer UBI-related discounts only – never UBI-related penalties – and watch your customers respond.
Usage based insurance is on the rise… are you ready?
In every single one of the fifty states, there are at least four personal UBI programs up and running. As the usage based insurance model continues to gain traction into the mainstream, it stands to become not just an alternative, but a fundamental option that your customers expect to be able to choose if they wish.
How do smartphones impact this picture? Among those who already own a smartphone, the number of respondents willing to try smartphone-based UBI is an impressive 80%.
Smartphone UBI is easier for consumers as well as insurance providers, as there’s no under-dash installation and no upfront equipment costs. Smartphones also deliver an excellent user experience, one which customers are very comfortable with. Apps are fun, they add convenience, and they’re already a daily part of people’s lives.
Talk to us about developing a smartphone UBI program that works for your company: Click here to see how it works.