Drivers Demand Price Transparency and Behavior-Based Insurance Programs, Finds Cambridge Mobile Telematics Survey

By a News Reporter-Staff News Editor at Obesity, Fitness & Wellness Week -- Price transparency is becoming the new norm as auto insurers shift to meet consumer expectations that policy rates should be based on driving behavior. Those are the results of Cambridge Mobile Telematics' (CMT) new survey of more than 700 drivers, which revealed reliance on traditional methodologies for risk pricing is straining customer relationships and hurting auto insurers financially (see also Cambridge Mobile Telematics).

CMT's research found that only 20 percent of survey respondents have full clarity into how their auto insurance provider sets their policy rates. Nearly three out of every four drivers (73 percent) surveyed believe rates should be based on how safely they drive, as opposed to traditional demographics like the location of where they park (4 percent), age, gender and marital status (4 percent), credit score (4 percent) and income (8 percent).

"While the conventional model worked well for insurers in the past, only leveraging traditional data points represents a losing scenario for everyone today. We're seeing insurers struggle to accurately predict risk which impacts loss ratios and the bottom line, and way too many safe drivers are experiencing sharp premium increases due to the risky behaviors of others," said Sam Madden, co-founder and chief scientist at Cambridge Mobile Telematics. "The advent of smartphone telematics adds a level of transparency that both customers and insurers can trust, and helps auto insurers price drivers based on what matters most: how well they drive."

Keywords for this news article include: Cambridge Mobile Telematics.

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