Telematics. I’m sure you’ve heard the term, but many are still trying to figure out what it is and what it means for their brands. While telematics is gaining traction in the healthcare and auto insurance spaces, its opportunities are limitless as it’s founded on the premise of using data to offer a better customer experience. Here at Epsilon, we’re exploring the best targeting, channels, creative and more for our auto insurance clients. Earlier this month I attended Insurance Telematics USA 2014 in my home city of Chicago, where more than 800 auto insurance and marketing professionals met to discuss the latest and greatest in usage-based insurance (UBI). Speakers representing brands like Allstate, LexisNexis, PwC, Progressive and more took the stage to share their experiences. At the conference it was projected that by the end of 2015 insurance telematics will reach a tipping point in the marketplace. And I agree considering a recent LexusNexis survey found that 79% of consumers said they’re definitely or somewhat interested in insurance telematics. So for those of you interested in the telematics discussion, below are key stats and trends to be aware of:
- More and more insurers today offer UBI, where users allow the insurer to monitor their driving habits with a telematics device in exchange for potential savings.
- UBI allows premiums to reflect actual driving behaviors rather than traditional pricing methods.
- The National Association of Insurance Commissioners has said that 20% of all motor vehicle insurance in America will incorporate UBI within five years.
- LexisNexis found UBI awareness has more than tripled in the last three years.
- Drivers ages 21-34 are the most likely to be receptive to UBI.
- There are more than 25 mainstream UBI programs currently available in North America.
- Mobile will play a vital role in UBI telematics programs.
For those of you who do not work in the auto insurance space, telematics is sure to impact you in some form or fashion. Whether it’s because consumers have more pocket change to spend as a result of their lowered insurance rates, or your specific vertical adopts a similar practice, telematics is something to take note of. Want more telematics stats? Check out my previous post, Driving Loyalty: Telematics 3.0 Infographic.