As the concept of usage-based auto insurance (UBI) becomes increasingly prevalent, global professional services company Towers Watson is working with several large insurers, and has gathered and analyzed information from thousands of vehicles throughout the United States as part of its DriveAbility service offering. DriveAbility provides analytical support for insurers that translates to an individual score for each vehicle to both inform auto policy rating and encourage safer driving habits.
For insurers, UBI offers a new way for companies to differentiate their products, while also increasing profits and retention as the technology utilizes actual driving data to determine more accurate premiums. UBI helps customers by not only empowering them to improve their rates, but also helps them to select the most appropriate insurance product for their needs; for example, parents may select UBI products to monitor their teen drivers.
UBI goes beyond traditional insurance pricing algorithms by using actual vehicle operation data to measure risk exposure, achieved in near real time. With DriveAbility, insurers can provide policyholders with personal driving data via the Internet on a daily basis. Studies have demonstrated dramatic reductions in risky driving behavior with regular feedback.
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