Telematics motor insurance – we wondered if consumer perceptions have changed in the last 2 years.
We analyzed the Redtail / YouGov survey results from 2020 to those from 2022 and here is what we found…
From Actuarial Post’s Ivan Clarke, 2012:
“This new insurance policy priced on how, when and where I use my car seemed so liberating. My wife and I signed up to one of these new telematics insurers as soon as each of our policies came up for renewal. For me, all the data and information they provided about my journeys was fascinating. I loved the experience of the interactive online dashboards, and monitoring my driving style to see if I could continually improve how I drive; it became something of a personal challenge. My wife was less impressed as I pointed out rather too gleefully that her driving style is more dangerous than mine.
The wealth of information that telematics brings will aid insurers to better price and select risks at renewals.”
All of which remains true and yet largely unfulfilled.
REDTAIL’s recent primary research revealed that just 4% of consumers surveyed have been offered a telematics-based policy. I would like to compare those findings with our 2020 survey:
We have selected just five of the parameters that we surveyed to scrutinize trends.
1) Have a positive impact on the environment
It is not surprising that this perception has more than doubled since early 2020. However, there has been precious little explicit promotion around this idea. The potential to increase understanding on how telematics-derived driver behavior change can benefit the environment must present an opportunity for the insurer to differentiate.
2) Benefit in event of a claim
While this score has doubled over the three-year period, the overall score remains low. The debate must be whether this benefits the insurer or the policyholder. I would argue it benefits both. The clean and clear understanding, communication and settling of a claim offers efficiency for Claims Management. More importantly, it promises the most supportive claims journey for individual policyholders. A positive for the insurer brand.
3) Believe would improve driving
Is this perception or reality? Firstly, (and our sample presented an equal gender split!), anecdotally everyone feels that they are at least an ok driver! Secondly, there appears to be some understanding of the value of telematics data. This is perhaps at odds with the general findings of this survey. HOWEVER – it is a clear indicator that consumers would accept driver coaching as part of their policy incentive and benefit.
4) Encouraged to buy
Consumer appetite for the value in a telematics-based policy has grown by a third in the time between the two surveys. This initial positive sentiment recognizes that fairer, better value motor insurance can be available through the deployment of telematics technology and the offer of a discount. Our Partner ByMiles has led the way in offering better value through the miles tracker (REDTAIL OBD) device. ByMiles policyholders pay a monthly fee plus a fee per mile driven. This offers savings opportunities, sometimes as much as 30%, for all lower mileage drivers.
5) Consumer offered policy by insurer
This is the starkest statistic. Just 4% of our sample have been offered a telematics-based motor insurance policy. Only a one percent increase from our previous survey demonstrates little promotional push. There is now an opportunity to capitalize on the post-pandemic consumer appetite for fairer car insurance. Combine that with an increased understanding of the environmental benefits and surely a winner!