Traditionally, insurance premiums are set by using information provided by the vehicle driver to determine a risk level for that driver and the vehicle. Some of the risk factors in this model are how often the policyholder commutes and how far, the type of car they drive, where they live, and their driving record. All of these factors and more are used to estimate the level of risk they represent, and the insurance premium is set accordingly.
In this traditional model the information about commuting frequency, distance and other usage factors is provided by the driver using estimates and which can make the data inaccurate. By tracking the actual distance driven the INSURE solution provides accurate information, which means insurers can price premiums more accurately and fairly. This is the benefit of UBI.
If you are an insurer, INSURE can improve your business in the following ways:
- Policyholders are incentivised to modify their driving behaviour, reducing risk and improving your profitability by reducing claims and payouts
- Acquisition of new, lower risk customers drawn by the appeal of the lower premiums of your UBI products
- Increasing your non-UBI policy premiums over the longer term to better reflect their risk or to lose these drivers from your books
- Premium discounting for reduced risk is only one option. What if you were to also offer loyalty rewards to your customers based on their driving behaviour? Fuel, tyre or servicing discounts? Restaurant offers? Loyalty “points” the customer can use for whatever they choose? This is all possible with the INSURE platform.