Amid reports from
Desjardins about P&C insurance premiums increasing by 5.4 per cent, brokers should be aware usage-based auto insurance programs have been among their most impressive recent performers.
Sylvie Paquette, president and chief operating officer stated, “More than 50,000 ‘mostly new clients’ have registered for DGIG’s usage-based auto insurance programs since they were launched in May 2013.”
In theory, everyone wins. Companies pursuing such strategies attract better drivers who crash less, while customers are able to pay premiums based more on how they drive and less on their age, gender or credit history.
The only caveat is some experts believe it is only a matter of time before companies will contribute complete driver histories to an industry database, which will then be used to generate driver scores that will follow consumers when shopping for new auto policies.
Desjardins General Insurance Group Inc. has offered usage-based insurance under the Ajusto brand to auto clients in Ontario and Quebec, as well as under the Intelauto brand to clients of its group insurance segment. Customers can obtain a 25 per cent discount based on good driving behavior in areas such as total distance traveled, time of day traveling, hard braking and accelerations rates. These metrics are measured through a telematics device from iMetrik that plugs into a vehicle’s diagnostic port.
Although some consumers may be apprehensive about installing technology that tracks their every move, brokers should explain the potential savings could outweigh their concerns. (continued.)
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Costs to both providers and consumers could be cut even further by a new smart-phone deployed, cloud-based technology that provides insurers with comprehensive insured driving data for better pricing intelligence. This technology was the hot-topic of discussion at a recent Driveway Software workshop titled “Is using an OBD Device the Gold Standard for Usage-Based Insurance?”
According to Harriet Molyneaux, Project Director, Telematics Update, "The usage-based insurance device debate appears to have moved on from 'if' the smartphone will be utilized, to 'when' it will be incorporated into multiple UBI programs, making it a serious contender in most companies' insurance strategies."
