Ptolemus, a location-based services and telematics advisory firm, has detailed the growth and current state of Usage-Based Insurance (UBI) products in a new report.
The impact of phone apps is particularly visible in China, says Ptolemus, where recent regulatory changes created an estimated 1.8 million smartphone insurance policies.
Statistics also show that UBI has moved into the mainstream since its introduction as a niche product 10 years ago, with the total number of policies worldwide currently standing at 20 million.
It has since grown to cover all customer segments using countless value propositions and six different device categories.
UBI has entered a “new phase” as it integrates with and powers insurers’ mobile strategy, says the report.
Four million smartphones are now used in UBI and Try Before You Buy (TBYB) programmes, making this platform the most effective.
There are now almost 100 more active UBI programmes compared to two years ago, Ptolemus found. The biggest growth markets are also changing with Germany and France now leading more mature markets such as Italy and the U.S.
However, despite this growth, the market remains in its infancy. Something that is underlined by the fact that currently, only 5% of Americans use UBI.
“Altogether, the PHYD (Pay How You Drive) model still represents the majority of policies, but PAYD (Pay As You Drive) is still a very potent value proposition that is gathering investments and now represents 27% of the market,” says the report.
Also, 30% of the 98 mobile UBI programmes active today are TBYB, where the driver can monitor its driving without being insured through the app.
Read more at https://www.reinsurancene.ws/usage-based-insurance-solutions-no-longer-niche-ptolemus/
