Personal Auto Insurance is experiencing an unprecedented transformation driven by increasing improvements in telematics. One area leading the transformation is Usage-based Insurance (UBI). While this technology has existed for more than 10 years, it is finally being accepted and adopted by insurance carriers and drivers alike in significant numbers. Fueled by the evolution of telematics, risk models, and pricing; UBI is experiencing quicker-than-anticipated growth. Carriers are presented with new opportunities and challenges unlike any ever before in this new world of technology-driven innovation.

2023 DriverScape Survey Results

In an effort to understand consumer perspectives and address top challenges, AAIS conducted a direct, online, random sample survey. The survey was designed to collect data to help improve segmentation and understand opportunities and challenges in the market.¹

• With a population of approximately 276 million privately-owned automobiles, AAIS targeted a 90% deterministic confidence level with an 8% margin of error.
• In addition to extracting insights from industry reports, AAIS’s research was focused on evaluating consumer attitudes, perceptions, requirements, and challenges of UBI adoption. Building on GDPR categories, AAIS also focused on identifying the top challenges and strategies for insurance carriers in this report.
• The "Acceptors" segment has grown 14% since 2022, with an age range of 55-64 year-olds being the most receptive.
• The "Detractors" segment has declined 28% since 2022 (45% to 17%), with ages 45-54 showing a decline of over 50%

UBI has been around for over a decade and its adoption has been slow. With telematics technology, risk models, and pricing going through significant enhancements recently, consumer adoption has accelerated over the last 2 years. There are several takeaways from the report for insurance carriers to consider.

1. Consumer UBI challenges continue to be data transparency and driver privacy
2. UBI is a rapidly growing, thriving market
3. UBI requires tailored strategies to address unique challenges and opportunities
4. There are many opportunities to enter and gain a share of the UBI market
5. Insurance carriers should act now, target the right segment, and offer the right value

A brief 2023 DriverScape Summary from this year's AAIS Webinar Series: DriverScape - Insights & Opportunities for Auto Insurance Carriers is available. Click below to download a copy. 

The full replay of the recent 2023 DriverScape Webinar Series presentation is also available to watch in its entirety On Demand by visiting the link below.

The traditional market is shrinking. What are you doing about it?
We see sub-segments in the auto insurance market that are changing. If you would like to know more, please reach out to your Engagement Manager or contact Ash Naik.

[1] AAIS targeted a 90% deterministic confidence level with an 8% maximum margin of error.