UBI auto insurance market poised to grow nearly 25%
More than 30% of consumers are showing interest in UBI coverage as they are driving less due to the pandemic.
Usage-based insurance for auto coverage is anticipated to surge in the coming years, with the global market expected to witness nearly 25% growth through 2026, according to UnivDatos Market Insights.
Major factors pushing this market forward are flexible premiums, lower accident and vehicle theft possibilities, accurate and timely data collection and lower fuel consumption, according to the market research company.
This growth is no secret in the auto industry, as General Motors has recently brought insurance products to the market that leverage data collected by its OnStar service.
“OnStar Insurance will launch as a more traditional product, but our goal is to add more and more usage-based datapoints as the product evolves, and only do it with the consent of the customer,” Stuart Fowle, GM brand and innovation communication manager, previously told PropertyCasualty360.com. “A customer can also buy our product without sharing data but won’t benefit from the same opportunity to save money for safe driving behaviors. We’ll also offer homeowners and renters’ insurance for those who want to bundle services.”
Pandemic moving needle for consumers’ interest in UBIs
The pandemic is also driving up interest among consumers for technology-based policies. In March, around 10% of consumers were more willing to use UBI. Through May 12, that number increased to 31% as miles driven saw a sharp drop off, UnivDatos reported.
“The COVID-19 crisis has also proven the durability of the model and inspired more interest,” confirmed Rick Chen, director of communications for UBI-policy provider Metromile, Inc. “Our pay-per-mile model is a strong fit for work from home and future mobility trends, including autonomous or connected vehicles, and car-sharing or ride-sharing.”
In addition to tracking mileage, Chen told PC360 the company monitors other driving habits such as average speed and time of day to determine the “quality of each mile driven.” When taken into account, safe driving measures can lead to base and per-mile rate discounts during renewals.
“The technology also helps us automate claims, in some cases entirely, and provides exclusive features like street-sweeping alerts in select cities, auto health tips and lost vehicle recovery,” he explained, adding the company has a 92% stolen car return rate.
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