More insureds turning to UBI to counter rising auto premiums
According to J.D. Power and TransUnion's Q2 2022 LIST report, UBI adoption for those offered it has grown from 49% to 65%.
The number of customers shopping for auto policies rose over the second quarter of 2022, despite the fact that driving has become increasingly more expensive thanks to high gas prices and industry-wide rate increases, says the latest Insurance Loyalty Indicator Shopping Trends (LIST) report from J.D. Power, in collaboration with TransUnion.
As premiums have risen, usage-based insurance (UBI) programs have become more popular with consumers looking for ways to lower their rates. According to the report, during Q2, the number of customers who were offered a telematics-monitored policy rose from 32% to 40%, and the amount of customers who opted in to these policies jumped from 49% to 65%.
The highest numbers of UBI-adoptees were among those who self-reported their credit tier as fair/poor, as opposed to those who reported their tier as excellent/good.
“More customers are warming to the idea of using a telematics tool to enhance safe driving, while also lowering costs,” Senior Director of Personal Lines Market Strategy at TransUnion Michelle Jackson is quoted in the Q2 report. “Consumers are shopping for lower premiums, better coverage and superior service from their insurer.”
Some insurers are tweaking operations to remain profitable in the inflated 2022 economy, and the Q2 report cites one such decision by Geico, which shut down quoting in its call centers in some states in April 2022. This led to a decrease in their quote volume, which allowed rival Progressive, which has historically trailed Geico in quote volume, to surpass them in the latter part of Q2. Geico’s quote rate fell from 19.3% in April 2022, to 18% in June 2022, while Progressive’s quote volume began the second quarter at 18.4% and finished in June at 19%.