Forbes on Smartphone UBI: 8 Pretty Amazing Takeaways
A few days ago, Forbes published this article on how insurance providers are leveraging smartphone UBI technology to track driving behavior and offer customers better-targeted plans. Here are the takeaways.
1. Progressive is taking Snapshot to smartphones.
Snapshot is a device that can be installed on a vehicle to track mileage and monitor driving behavior, like when a driver slams the brakes. Now Progressive “has challenged more than a dozen tech entrepreneurs and mobile developers” to deliver the same functionality via smartphone UBI app, in time to launch next year, according to Forbes.
2. A smartphone UBI app could theoretically do more, more easily.
The current version of Snapshot can’t combine its readings with GPS data; a smartphone UBI app could. Also, while Snapshot has to be physically installed on a vehicle, smartphones are simply along for the ride – making the customer’s life easier.
3. But first, engineers have to distinguish between “sudden braking” and “whoops, I dropped it.”
The idea of tracking motion with a smartphone poses a few legitimate hurdles. How can an app keep your driving behavior separate from the normal motions you put your phone through during the day? (Hint: Driveway knows the answers to these questions.)
4. That doesn’t mean it can’t be done.
Allstate has already done it. To compete with their rival Progressive, the company introduced the smartphone UBI app Drivewise, which launched last month and is currently being tested in three different states.
5. Continual improvement is key.
Progressive is taking its time. According to the Forbes interview, they’ve been developing their approach to driver-monitoring since 1998, and continue to evaluate a variety of possibilities, including a hypothetical collaboration with Google Waze. In this case, customer perception and excellent results take priority over a speedy launch.
6. Even with behavior-related discounts, numbers are up.
Customers who use Snapshot get a good deal: The Forbes article reports that Progressive has chosen to make the discount so big, the company only breaks even. Still, Progressive benefits nonetheless: these usage based insurance drivers get in fewer accidents and remain customers longer.
7. Behavior change may be in the cards.
Nobody’s ready to spill the beans, but according to the Forbes article, Progressive is thinking about incorporating driver-feedback into their plans for the new smartphone UBI app so that drivers can improve driving habits over time.
8. Smartphone UBI is a “rapidly expanding phenomenon” projected to reach $80 billion by 2020.
The idea of smartphone UBI auto insurance apps has been catching on globally, the consulting firm Ptolemus reports, with wearable devices that allow users to pay (and get rewarded) for how they actually behave – a concept so attractive, the trend is likely to spill into other markets, like health insurance, as well.
Find out why smartphone UBI apps are catching on so fast: click here.