The vast majority of drivers on Canadian roads are unfamiliar with usage-based insurance, according to a recent Kanetix study – and that may be fuelling the reluctance by some to embrace a telematics solution.
“As brokers, they should be advocating the savings,” says Andrew Lo, chief marketing officer and chief strategy officer at Kanetix.ca. “There are concerns out there that the information could be stolen – so brokers need to get the message out and educate consumers about telematics.”
The Kanetix survey shows almost 80 per cent of Canadians are unfamiliar with usage-based insurance.
“Even though this is a relatively new approach to auto insurance in Canada,” says Lo, “the number is still quite surprising.”
The survey, conducted by Leger for Kanetix.ca, looked at Canadian consumers' familiarity with the notion of usage-based insurance, their willingness to take part in a program, savings expectations, and concerns.
Highlights include:
• The Opportunity – Even though the vast majority of Canadians are not familiar with usage-based insurance, six in 10 say they're willing to join a usage-based insurance program if there's an opportunity to pay less for their auto insurance coverage;
• The Expectations – Sixty-one per cent of Canadians believe they would indeed pay less for auto insurance, but two-thirds say that it would take more than $100 per year in auto insurance savings to entice them to switch; and
• The Concerns – Privacy is the biggest concern by Canadians with 75 per cent of Canadians expressing concern about the security of their personal information. Other significant concerns include: the information being used to deny an accident claim or cancel a policy; ownership of the information collected; the sharing of information with other auto insurers; and, that the device itself will not capture driving habits accurately.
As far as concerns from smaller insurers who may be leery of paying the initial cost of the telematics devices, there are other options, says Lo. (continued.)
#pb#
“Having smart phones do the recorded of the data is one way to avoid those costs,” he told Insurance Business. “We are putting out a free app in the coming weeks that can do the tracking from a cell phone – KanetixDriveSmart.”
The app allows drivers to get a feel of what their driving habits are like, and if telematics would be of benefit to them.
The survey of 1,555 Canadians was completed online between April 28 and May 1 of this year, using Leger’s online panel, LegerWeb.
