Personal auto carriers are rapidly approaching a moment of truth when it comes to usage-based insurance programs. That goes both for insurers that have already launched telematics-based products, as well as those that for a variety of reasons have remained on the sidelines.
Early adopters of usage-based insurance (UBI) are gaining a wealth of firsthand experience and insights that stand to provide a long-lasting competitive edge against insurers that up until now have been undecided about whether or when to follow suit, as well as those either unwilling or simply unable to do so. Trailblazers are rapidly collecting a critical mass of data that can be analyzed to assess driver behavior and provide a basis for greater precision in underwriting and pricing.
For example, current rating methods would likely price two drivers identically if they had the same credit scores, automobiles, and demographics, while living in areas with similar geographic profiles.
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