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LexisNexis Posts Results of Its Annual Telematics Study

Proquest LLC

Consumers are beginning to see the safety benefits associated with telematics as a major proof point when deciding whether or not to adopt a usage-based insurance (UBI) program according to a study released on August 27 by LexisNexis Risk Solutions.

According to a release from the Company, in addition to polling consumers, commercial fleet managers were also surveyed on the topic of UBI and reported interest primarily in price cuts. Furthermore, 25 percent of commercial fleet managers reported awareness of UBI programs compared to 38 percent awareness by consumers according to the study.

Additionally, consumers comfort levels with sharing personal UBI driving data are increasing. In fact, the consumer comfort levels with sharing individual UBI driving data (35 percent) are comparable to their level of comfort for sharing online banking data (36 percent), search data (29 percent) and social media personal information (27 percent).

"Our study has found some of the traditional barriers are beginning to subside, such as the difficulty to use and the fear that insurance companies will have too much personal information," said Ash Hassib, Senior Vice President and General Manager, Auto and Home Insurance, LexisNexis. "This shift shows us that consumers are becoming more trusting of telematics, and therefore more likely to adopt."

While insurance rate discounts continue to be the number one driver in usage-based insurance adoption, more consumers are now viewing telematics as a legitimate resource for ensuring car safety for themselves and their families.

Specific findings showing the increasing importance of safety services among consumers include:

-Interest in teen tracking or knowing how your child drives has increased by 12 percent since 2013

-Forty-five percent of those surveyed are more likely to adopt UBI to get information on how others in their household are driving

-Interest in safety features, such as emergency roadside assistance, automatic emergency crash response and stolen vehicle tracking and recovery has increased by 6 percent since 2013

Similar to basic UBI, interest in Mobile UBI is also growing with an increase from 29 percent in 2013 to 34 percent in 2014. Additionally, smartphone penetration among enrolled drivers is expected to be high.

"Smart devices, smartphones and smart cars are converging to create what should be a smart insurance choice for safe drivers and their insurers," wrote Ellen Carney, Principal Analyst, Forrester Research, Inc., in the June 2014 report, The Next Act For Usage- Based Car Insurance. "The policy option is a win-win for the insured and the insurer: Customers pay lower premiums and improve their driving, while insurers attract safer and lower-risk drivers. What is surprising is how few US consumers have actually bought it," added Carney.

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Price and savings are the number one factor in fleet managers' decision to incorporate UBI into their small commercial fleet. Despite significantly less insurer marketing for UBI in this space, small business awareness of UBI is relatively strong at 25 percent.

The study also explored the effect of value-added services, mainly fleet management capabilities, on a UBI program offering. Contrary to common beliefs, results show that small fleets want UBI, with or without fleet management services. They find the discount and simplicity of UBI appealing.

"Two-thirds of small fleet managers shop for insurance every two years or more," said Ernie Feirer, Vice President and General Manager, Commercial Insurance, LexisNexis. "These fleet managers are looking for ways to save money and our study shows 27 percent of them would sign up for a UBI program. This leaves a lot of room for growth and a huge opportunity for carriers offering UBI."

Specific findings showcasing how commercial fleet managers are adopting UBI to save money include:

-Saving money on commercial auto insurance is extremely important to three-fourths of fleet managers

-Seventy-two percent of fleet managers are more likely to enroll in usage-based insurance under a three month trial

Small fleet managers also value services such as stolen vehicle tracking, fuel consumption/efficiency updates and automatic emergency crash response, according to additional findings from the survey. Commercial fleet managers are also receptive to mobile UBI technology and 73 percent of small fleet drivers have smartphones.

"With the uptick in consumer awareness shown in the study findings, we are more dedicated than ever to bringing insight- driven, end-to-end UBI solutions to our customers," Hassib said. "With our recent acquisition of the UK-based industry-leading telematics data services company, Wunelli, we now possess one of the largest provider-held insurance telematics databases in the world. This allows us to best support insurers as they assess risk, discount safer drivers and serve their customers more effectively."

LexisNexis Risk Solutions is a company focusing on providing information that helps customers across industries and government predict, assess and manage risk.

More information and complete details:

www.lexisnexis.com/risk

((Comments on this story may be sent to newsdesk@closeupmedia.com))

Copyright:(c) 2014 ProQuest Information and Learning Company; All Rights Reserved.
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