The auto insurance landscape is evolving rapidly, driven by technological advancements and changing consumer preferences. The third annual AAIS Driverscape report provides valuable insights into these shifts, helping insurance carriers navigate the complexities of the modern market.

Driverscape 2024 Survey Results

Consumer Attitudes and Adoption Trends

The adoption of usage-based insurance (UBI) has been gradual but is now accelerating. Younger, tech-savvy, and environmentally conscious drivers are more inclined to adopt UBI, which bases premiums on telematics data. This trend highlights a significant opportunity for insurers to target these demographics with tailored products.

Vehicle Ownership and Charging Infrastructure

The shift towards environmentally friendly vehicles is evident, with 6% of vehicles being fully electric and 11% being hybrids. A notable 71% of electric vehicle (EV) owners rely on at-home chargers, emphasizing the importance of home charging infrastructure. Insurers need to develop products that cater to the unique needs of EV owners.

Income Distribution and Market Segments

Higher-income brackets are more likely to adopt UBI, with 31% of EV owners earning between $100,000 and $149,999 annually. This demographic presents a lucrative market for insurers offering premium products and services.

Telematics and Privacy Concerns

Despite advancements in telematics technology, data privacy and security remain significant barriers to UBI adoption. Insurers must address these concerns through transparent communication, robust data protection measures, and clear policies on data usage and ownership.

Key Consumer Segments

Driverscape 2024 identifies three key consumer segments: Acceptors, Undecideds, and Detractors. Each segment presents unique opportunities and challenges:

• Acceptors are likely to switch to UBI if privacy and data transparency concerns are addressed.
• Undecideds represent a significant growth opportunity if insurers can assure them of the fairness and transparency of UBI systems.
• Detractors require targeted strategies to overcome their strong reservations.

The Role of Telematics

Telematics technology enables the collection of detailed data on driving behaviors, providing a more accurate assessment of risk. UBI programs leverage this data to offer personalized premiums, potentially overcoming long-standing biases and enhancing fairness in pricing.

Market Structure and Demographics

The market is seeing a shift, with traditional insurance consumers dipping below 60% for the first time, and telematics-powered UBI crossing 40%. Younger drivers, particularly those under 35, show a higher propensity for owning electric and hybrid vehicles and are more open to UBI.

Charging Infrastructure for EVs

The EV charging infrastructure is crucial for adoption and daily usability. Most EV owners prefer at-home chargers, but public and workplace charging options also play a role. Insurers need to consider these patterns when assessing risk and developing tailored products.

Income Distribution of EV Owners

EV ownership is more prevalent among higher-income households, with significant segments earning between $100,000 and $199,999 annually. This trend underscores the importance of targeting higher-income demographics with UBI products.

The full Driverscape 2024 summary from this year's market survey is available. Click below to download a copy.

Watch the replay of the recent AAIS webinar, Driverscape 2024: Opportunities in UBI Auto Insurance, where Ash Naik, Auto Product Manager at AAIS, reviewed the research report results and unveiled market opportunities.

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 our Member Engagement team or contact Ash Naik.