Usage-Based Insurance Accelerates In the United States
As UBI programs continue to gain popularity across the United States, driving behaviors, miles driven and time of day travelled will begin to replace traditional auto insurance.
Lately, it’s been hard to ignore the traction usage-based insurance (UBI) has been gaining in the United States. According to PTOLEMUS, a Brussels-based research and strategy consulting firm focused on mobility, of the 875 million auto insurance policies, about 20 million were usage-based last year. Acumen Research and Consulting, a global market research firm found the global usage-based insurance market growth is estimated to grow at CAGR above 29% over the forecast time frame 2019-2026 and reach the market value of $190 billion by 2026. The future of automobile insurance is rapidly transforming away from traditional auto insurance to premium auto insurance programs powered by telematics data.
Statistical evidence supports the argument that drivers perform better and follow safer practices when enrolled in a insurance telematics program, with the understanding that their driving performance is being analyzed. Good driving behavior can be supported in a number of different ways in this type of program, reinforcing habits that can lower the frequency and severity of accidents and claims. For example, if feedback from a smartphone app can point out to a driver that his or her late-braking behavior is likely to result in rear-ending another vehicle, the driver will often respond to this information by changing this behavior and braking earlier. Recognizing problem driving behaviors and their corresponding relationship to accidents can be a strong motivator to improve driver behavior.