These findings indicate that carriers' current approaches to UBI are no longer sufficient, and that it's time to retool and promote UBI in different ways, LexisNexis suggests. More than half (52%) of the 2,042 respondents to the firm's study say they would be more likely to enroll in UBI if they were offered a $200 discount in their insurance deductibles, instead of a 10% discount on their insurance premiums.

"In fact, carriers may not need to rely on discounts in order to be successful in the consumer UBI market," writes Lukens, the study's author. "Messaging around safety may be even more effective than a discount-based approach."

The study found that a "safe-driving concept" has the potential to keep customers engaged, mitigate risk and improve retention. This hypothetical concept is a smartphone app that measures consumers' driving score and provides feedback so they can improve their score—with no discount offered. The app would monitor and measure driving behavior, such as speed, acceleration, fatigue and phone use. This app could include a leaderboard feature that allows uers to see how their driving score stacks up against those of other app users.

The safe-driving concept also has the potential to keep drivers engaged, LexisNexis Risk Solutions reports. If they were to receive an above-average driving score, 67% of respondents say they would continue to engage with the app to monitor their score and improve driving. If they were to receive an average driving score, that number increases to 74% and to 77% for those receiving a below-average score.

Consumers also are interested in obtaining rewards for good driving, such as free oil changes or loyalty points, as part of enrolling in UBI. 

(Figure provided from LexisNexis Risk Solutions' Usage-Based Insurance Study. Click image to enlarge)