Auto-insurance consumers are at once interested in and largely not purchasing usage-based insurance products, posing a dilemma for personal-lines insurers who appear rightfully convinced that a market for these products exists, if only they could find the right way to tap into it.
Glenn M. Renwick, CEO of Progressive, outlined the struggle in his second-quarter-earnings conference call last month. Renwick told analysts, "I will tell you that getting consumers to engage in a product that, for the most part, they were never asked to engage in…it's a bigger burden than, I think, intellectually, many of us might have assumed."
But an inability so far to connect with consumers on the messaging front does not mean that drivers are not interested in UBI products, at least according to a recent survey released by Towers Watson. That survey reveals 79 percent of consumers would be willing to consider a UBI auto-insurance product. The number jumps to 89 percent if there was a guarantee that a switch to such a product would not result in a rate increase.
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