The pandemic boosted interest in auto telematics
More than half of drivers now say they are comfortable with rates based on miles driven, up from 41% in 2019.
In the chase for lower rates, consumers are exhibiting more willingness to share driving data with their insurers, according to CCC Information Services, Inc.‘s Crash Course report. Propelling some of this interest is the fact that many drove fewer miles during the past year due to the pandemic.
The study found 54% of drivers are now comfortable sharing information on miles driven for pricing, compared with 41% in 2019. Further, nearly 60% said they are comfortable sharing distracted driving details, while almost half would reveal speed and location data, CCC found.
In addition to lower rates, telematics can also help drivers improve their habits and drive higher levels of engagement through driving scores and gamification, the report found.
A combination of more willing consumers and the accelerated pace of digital adoption during the pandemic is poised to turbocharge the North American telematics market, which is anticipated to experience nearly 30% growth, compounded annually, by 2024, according to ResearchandMarkets.com.
Improved underwriting, engagement
According to CCC, insurers will see improved underwriting as an added benefit of drivers’ embrace of usage-based insurance. Additionally, they’ll have the opportunity to expand consumer engagement beyond policy purchases, renewals and claims.
The ability to improve the customer relationship through telematics has caught the eye of automakers, CCC reported, who are seeing the potential to monetize connected-car data and create consumer touchpoints throughout the vehicle ownership cycle. For example, GM announced its OnStar Insurance late last year, and other car manufacturers are doing the same.
In addition to leveraging digital tools for lower rates, consumers are also showing more willingness to use technology in the claims process. J.D. Power reported the use of digital claims channels has increased 18% during the past three years. Further, 84% of those filing a claim reported using digital tools. This ranges from photo estimating and electronic document exchanges to chats and shopping around for repair shops.
CCC noted insurers that are leveraging these touchless claims experiences are being rewarded for offering “curated customer experiences,” as digital claim filing leads to overall positive experiences and faster resolutions. Among insured that initiated a claim using photos or a mobile app, 80% found it appealing and easy to navigate the process.
Related: