- Where Insurance & Technology Meet

Survey Says: A Sharp Telematics Arrow Targets Drivers

Sometimes the results of a survey will disclose more about the organization conducting the survey than about the individuals responding to the survey.  This seems to be the case with a survey sponsored by Progressive Insurance on driving habits and willingness to use telematic devices to support pay-as-you-drive insurance plans.

This was not a low budget, web based survey.  It was  a telephone survey of 1,003  Americans conducted by Harris Interactive, a well regarded professional polling and analytic firm.

The purpose of the survey, according to the release by Progressive,  was “to estimate the potential number of people who could save on car insurance.”  The headline finding was “More than 70 million drivers in the U.S. could qualify for significant car insurance savings.”  How?  Progressive advises, “by taking advantage of usage-based insurance programs like Snapshot from Progressive. Snapshot rewards safe drivers with a discount of up to 30 percent on car insurance.”

Clearly, the survey was designed to support a particular result  But beneath the surface, there are some interesting aspects. The survey found:

  • 50 percent of respondents say they drive less than 12,000 miles per year, even lower than the national average of 13,476 miles per year (source: U.S. Department of Transportation);
  • 84 percent of drivers define themselves as cautious (49 percent) or defensive (39 percent); and
  • 88 percent are never or rarely on the road between the hours of midnight to 4 a.m. – the most dangerous hours to drive as defined by Progressive.

When all of the data are added together, Progressive advises, “39 percent of all U.S. drivers – or more than 70 million drivers – may be eligible to receive a discount on their car insurance.”

The real result:  These are the drivers that are in the cross-hairs of Progressive’s marketing.  And there are plenty of incentives:

“Good drivers should pay less for their car insurance – that’s something nearly everybody can agree on,” said Richard Hutchinson, general manager of usage-based insurance at Progressive. “Our data shows that more than 70 percent of all Snapshot drivers now enjoy extra savings, which is one reason why our program continues to grow so quickly.”

There are slight benefits to others, including insurers who are contemplating the leap into Pay-As-You-Drive schemes.  We have posted previously on the linkages between marketing, underwriting, and telematics.  The Progressive approach adds one more dimension:  market opinion research.   The ability to aggregate opinion data with behavioural data proves a powerful combination when it comes to advertising, further reinforcing a virtuous circle.

A circle meant to keep their good customers in, and keep competitors out.