At the Insurance Telematics USA conference in Chicago last week, several themes were prominent. Taken together, these themes suggest that independent distributors will be a key element in the success of Usage Based Insurance (UBI) in North America. This will be explored next at the Insurance 2023 Forum in Toronto.
- It’s ‘How’ not ‘Why’ – The conference differed significantly from last year’s event in that there was little discussion about why Telematics based UBI was important for insurers. The vast majority of the presentations focused on how UBI could be implemented to align with the strategies of various constituencies.
- Consumer knowledge is critical to consumer uptake – Various analyses presented found that the rate of uptake was slower than previously expected. The primary impediments related to consumer concerns that are resolved with proper education.
- UBI is one factor in a very dynamic automobile insurance environment – Several presentations noted that devel0pments such as the self-driving vehicle will put severe pressure on the traditional auto insurance market.
- Competition will be shifting from price to value added services – There will be a number of pressures on auto insurers to find differentiators that go beyond price. Services from strategic third party suppliers – including OEMs, and Network Suppliers – will become critical success factors, but could further confuse consumers.
Brokers and UBI- A Crucial Piece of the UBI Puzzle
At a session entitled ‘Brokers & Agents: A Crucial Piece of the Puzzle’, three intermediaries and one insurer showed how independent insurance intermediaries are playing a key role in successfully negotiating a path to success based on these trends.
- While Progressive Insurance is best known for its mass marketing approach to UBI, the company still offers the product through its independent agent channel. Kirk Galasso, Senior ASR for Progressive notes that the carrier offers training to its agents on how to successfully identify clients that are likely candidates.
- Ted Poulos, a producer at Leech Bridges Agency in Zion IL, noted that on the surface, UBI has little direct value for independent agents. However, it is a new feature and provides another feature to offer to prospects, as well as another tool to help with retention of clients.
- Jim Kane, President of Hub International Personal Insurance agreed that knowledge of UBI plans was important in order to be able to act as a professional adviser to Hub clients. However, Kane noted that at this point, the majority of consumers find they are better off with non-UBI plans.
- Basil Enan, CEO and Founder of Coverhound, an insurance comparison shopping platform and national insurance agency, noted that UBI has become an important component supporting its goal of transparency for consumers.
What’s Next – What do You Think?
There are more questions than answers at the end of the day. As UBI based insurance matures, we are convinced that Brokers will continue to play a crucial role. At the Insurance 2023 Forum on October 3, 2013 in Toronto, automotive technology and insurance analyst, Catherine Kargas will be leading a discussion on the impact of Automotive Technologies on Insurance. We’d look forward to continuing this conversation with you there.
Meanwhile, please give us your thoughts below. How will brokers in Canada work with UBI programs? What are the opportunities? What are the challenges.
Drive your point home below.