ATLANTA, Aug. 25, 2016 /PRNewswire/ -- A new LexisNexis Risk
Solutions study on usage-based insurance (UBI) found
that a surprising number of U.S. drivers (50 percent) report enrolling in
pay-as-you-drive policies when offered, yet few are given the choice, revealing
a significant market-building opportunity for auto insurers. The 2016 LexisNexis® Usage-Based
Insurance Study on consumer sentiment towards telematics-powered insurance
found that just one in five consumers say they are given an opportunity to
purchase a UBI policy by their insurer. UBI enrollment, in turn, has remained
steady, but opportunity for growth is evident.
Key findings from the fifth annual study include:
UBI awareness is up 10 percent
Other approaches such as discounting deductibles may be as successful as
Increased interest from consumers between the ages of 45 and 64 may offer
carriers a new target market for UBI offerings.
Word of mouth, social media marketing and customer testimonials may be
needed to increase UBI adoption.
"The study revealed untapped opportunities for
insurance carriers to expand UBI into markets beyond tech-savvy, price-sensitive
millennials and promote the benefits of UBI with the motivators that move their
specific customers," said David
Lukens, Director of Telematics at LexisNexis Risk Solutions. "New
awareness-building and marketing approaches can lead to greater UBI adoption,
giving carriers a better way to understand driver risk, price policies and speed
the claims process. If they can capture and analyze vast amounts of driver data
through telematics and analytics, they'll be better able to differentiate and
deliver improved service in a competitive market."
Consumer Motivations for UBI
discounting premiums continue to be the most popular benefits for UBI programs.
Alternatives, such as discounting deductibles or offering roadside assistance,
are affordable and attractive ways to acquire new UBI customers. According to
the study there are also other motivations besides financial and service
incentives that are proving effective. Other factors that carriers should
consider when promoting their UBI programs include:
Helping to determine fault in accidents (70 percent would be more interested
Monitoring good driving behavior (64 percent would be more interested in
The technology's ability to provide immediate notification of an accident to
expedite the claims process (68 percent would be more interested in UBI).
Receiving alerts of poor driving behavior (62 percent would be more
interested in UBI).
Optimizing New Markets and Channels
enrollment remains strongest among consumers aged 21 to 25, increased interest
from consumers aged 45 to 54 may offer carriers a new untapped market
opportunity for UBI offerings, according to the study. With the highest increase
in awareness of UBI programs over the past year (up 6 percent), consumers aged
45 to 54 may be more interested in UBI programs due to having younger drivers in
their households, triggering interest in the safety and monitoring benefits of
UBI, or they may just be getting more comfortable with UBI technology.
Finally, highly influenced by others, 56 percent of
respondents said they wouldn't enroll in UBI unless consumer reviews or feedback
are available. And 40 percent said they wouldn't enroll unless someone they knew
participated first, which suggests that new marketing channels such as social
media, word-of-mouth and customer testimonials may also be needed to increase
For more information, download the 2016 LexisNexis Usage-Based
Insurance Study whitepaper.
About LexisNexis Risk Solutions
Risk Solutions is a leader in providing essential information that helps
customers across industries and government predict, assess and manage risk.
Combining cutting-edge technology, unique data and advanced analytics,
LexisNexis Risk Solutions provides products and services that address evolving
client needs in the risk sector while upholding the highest standards of
security and privacy. LexisNexis Risk is part of RELX Group, a world-leading
provider of information and analytics for professional and business customers
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SOURCE LexisNexis Risk Solutions