Roosevelt C. Mosley, Jr., principal and consulting actuary with Pinnacle Actuarial Resources, on the social media research his company has been conducting around usage-based insurance (UBI).
Pinnacle Actuarial Resources is an independent actuarial and management consulting firm, which provides underwriting, marketing and predictive analytics services to the automobile sector. It has also been working with Himexto provide insurance telematics solutions.
Mosley has more than 20 years of consulting experience with a heavy focus on predictive analytics.
TU’s Jan Stojaspal talked with Mosley about the insights his firm has gained into consumer reactions to UBI through social media research and about using these insights to expand UBI’s appeal.
What are some of your findings?
For consumers who are not involved in a UBI program, there are concerns about privacy and sharing a significant level of personal information – not just what is used to write a policy but now [also] real-time driving history. So there is a huge issue with privacy.
There is also a concern that if insurance companies have the data, then who else can get their data. Is the government going to keep track of my driving?
There are also concerns with the ultimate outcome of being involved with the program. There’s a lot of mistrust of the insurance industry and insurance companies. … If I don’t believe you as a company, then I see it as another way that you’re going to increase my rates or drop my coverage.
How can you use this knowledge to expand UBI’s appeal?
I think there are a couple of ways – certainly to the extent that companies deliver on their promises on UBI to their customers. In time, that’s going to help the overall feeling about the UBI product. Education is important, not just putting something on your website and hoping someone will find it. You need to be a little more proactive in terms of how you educate consumers on the benefits of UBI, potentially reaching out to them in unique and interesting ways that bring this information to bear for them.
Testimonials can help. On social media, there are customers that are complaining about potential concerns about usage-based programs. However, there are other people who have had positive experiences that insurance companies are able to capitalize on.
Can you be more specific on what needs be contained within this message?
Some of it is going to depend on the specifics of the company programs, but, certainly, there needs to be a clear understanding of the privacy elements. The other issue – trust – that is a lot tougher. But I think it’s going to evolve if companies deliver on whatever promise they’re making.
Is the belief that your insurance premium could go up one of the misconceptions?
It is. One of the things that we found from customers of UBI – specifically Snapshot insurance – is that, while monitored driving will not cause your premiums to go up, it could go up for other reasons. You could have these two events (UBI trial and a premium increasing) coinciding.
Somehow, companies are going to have to figure out how to either explain the message better, which I’m not sure is the answer, or take an approach that if somebody signs up for Snapshot, they’ll freeze their premium at the existing level when they sign up for a year or 18 months and then give them the UBI discount so they will actually see the decrease in premium.
It sounds as though a lot of education needs to be done, but the complexity of some of the UBI solutions, particularly when value-added services are involved, does not make it easy.
It does, and it doesn’t. I think that part of [the solution] is determining what your strategy is. There is definitely a strategy that focuses on price, and there are strategies that focus on price plus adding some value.
It adds some complexity, and there could be confusion. But, on the other hand, OnStar services and the safety they provide
, actually help to sell the product. Not only is it giving me a discount, but I’m safer because I’ve got this technology. That part is easier to explain than the fact that my overall premium went up even though I received a discount because I am a safer driver.
Jan Stojaspal is the executive editor of Telematics Update.
For all the latest telematics trends, check out Telematics for Fleet Management Europe 2014 on March 12-13 in Amsterdam, The Netherlands, Content and Apps for Automotive Europe 2014 on April 8-9 in Munich, Germany, Insurance Telematics Europe 2014 on May 6-7 in London, Telematics India and South Asia 2014 on May 28-29 in Bangalore, India, Insurance Telematics Canada 2014 on May 28-29 in Toronto, Telematics Detroit 2014 on June 4-5 in Novi, Michigan, Advanced Automotive Safety USA 2014 on July 8-9 in Novi, Michigan, and Telematics Munich 2014 on Nov. 10-11 in Munich, Germany.
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