Usage-Based Insurance Preparing for Takeoff in North America, Europe, and South Africa

A wave of adverse selection will soon hit auto insurers that ignore usage-based insurance.

Boston, MA (Sept. 24, 2013) – With South Africa as the model for telematics that fuel usage-based insurance (UBI) programs, North America and Europe are set to go mainstream as regulatory barriers fall, hardware costs drop, and consumers warm to having their driving behavior monitored in exchange for premium discounts. Auto insurers now view UBI as a major opportunity to more accurately price their books of auto insurance business and radically change the way they interact with their customers. Slow movers that take a “wait and see” approach to UBI will be at a competitive disadvantage, yet challenges remain even among those at the forefront of this emerging market.

Q: Do you have sufficient UBI data to apply to your loss experience?

This Impact Report by analyst Pat Speer sizes and describes the current adoption of UBI for private passenger auto insurance in North America, Europe, and South Africa, and highlights key growth drivers, challenges, and opportunities for auto insurers. It is based on Q2 and Q3 2013 Aite Group interviews with more than 35 executive stakeholders representing the insurance industry in the three countries discussed.

The 29-page Impact Report, containing five figures and 10 tables, is available from Aite Group.

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Source: Aite Group