Gaining a better understanding of how people actually drive (mileage, braking, speeding, etc.) has been a primary goal of many Auto Insurers for years. Having better data allows Auto Insurers to make more personalized policies, price premiums more effectively, and be more competitive in a crowded landscape.
When telematics burst onto the scene in the early 2000s, it was viewed as the silver bullet UBI solution. Whether it was a piece of hardware that plugged into the OBD2 port or the more cost-effective smartphone app, telematics promised continuous access to reliable data for Insurers while providing a low-effort way for consumers to save money on their policy by agreeing to passively share their driving data.
In reality, telematics has been met with low penetration and adoption rates fueled by consumer attitudes regarding privacy and concerns over not only what is shared but how it is shared. Given that telematics is not the one-size-fits-all solution that was anticipated, we need to consider other solutions that speak to those concerns so Auto Insurers can still manage to capture valuable data from the majority of their remaining customers that haven’t opted into passively sharing their data. This will allow them to offer a more personalized policy to the vast majority of their customers while putting them in full control of their data.
At Ownli, we believe that an opportunity exists for Insurers to empower their customers with more agency over their data. This means giving them full control of what they're sharing and providing full transparency into how it'll be used and how it will benefit them.
In a recent conversation with Alan Demers, founder of InsurTech Consulting, he shared that the whole point of UBI is to create fairness and greater personalized premiums where actual driving behavior is scored and applied to the customer. For Insurers, UBI helps to attract better drivers, aids in monitoring specific driving behaviors, rewards the best drivers, and often increases the premium for those drivers that are considered more risky. Customers that are willing to share their information in exchange for better premiums can benefit by paying less.
Progressive was the first mover in the telematics space but was quickly followed by others. However, the implementation of such programs often come with large price tags for not only the services but also the hardware and cellular data fees. Although hardware installed in the car eventually gave way to apps and costs were somewhat alleviated, telematics solutions continue to fall short of mass-market adoption.
Yet for all the benefits for Insurers and customers alike, there are elements of telematics that are just not clicking with most customers. Driver privacy, app adoption/retention, and lacking consumer awareness are often cited as some of the primary hurdles. This continues to be the case despite discount offers upwards of 30% to 40% on premiums, the rise in work from home, the COVID-19 pandemic, and the current economic environment, which should have all acted as tailwinds for increased adoption. As we’re learning, customer attitudes around privacy and sharing personal information with their Insurer are the driving forces behind the lack of mass telematics adoption despite the obvious benefits.
Consumer research conducted by the American Association of Insurance Services (AAIS) in 2022 showed that 45% of customers are open to UBI. For that 45%, the concept of UBI is solid and makes sense on paper – receive a more personalized policy that better represents your actual behavior. When customers are faced with the reality of sharing the data that is needed to power those programs, the results look drastically different.
In a 2022 survey conducted by Policygenius, 68% of Americans would not install an app that collects driving behavior or location data for any insurance discount amount. Year over year, Policygenius concluded more Americans opt for privacy over insurance discounts. Further, Americans' concern for privacy isn’t specific to the insurance industry.
Gartner, the technology consulting and research firm found similar results in their research. 79% of customers would like more control over the personal information they give businesses and the way in which it is used, while 53% want businesses to take a more proactive role in teaching them about online data privacy. In a recent article by Ars Technica, we see this same trend with connected home appliance makers who are struggling to get their customers to share connected dishwashers and refrigerators.
Privacy trumps any discount or deal a customer can get from a business. In order to find a path forward that results in a viable solution for both Insurers and customers, how that data is being collected and the benefit for the customer must be reconsidered. The opportunity is to give customers more agency over their data, be transparent in how it’s collected/shared, how it is used, and what the benefit will be for them.
We created Ownli because the relationship between Insurers and their customers is fragmented. It’s like this because no one owns their data.
For Insurers, there is an opportunity to make the customer the center of the data equation. This shift in mindset is the cornerstone of everything we do at Ownli. We’re an equitable data marketplace that connects Insurers and their agents seeking to create personalized, direct engagements with customers who own their data and proactively seek those engagements. With Ownli, customers are given full control over who they share their certified data with and have the ability to earn from it, empowering them to share it directly with Insurers.
Insurers can see this shift in mindset by putting their customers in full control of their data with the Ownli Pay-Per-Mile Solution (PPM). The Ownli PPM solution offers an out-of-the-box and regulatory-approved pay-per-mile solution that allows Insurers to launch in a matter of days since it doesn’t require any IT integrations or product development cycles.
It also creates a positive recurring feedback loop by putting potential and existing customers in the driver's seat of their data and incentivizes them to interact with Insurers by sharing their certified mileage data on a recurring basis. Rewards and mileage tiers are dictated by our partners and can be customized by state. Further, this solution allows Insurers to maintain rate adequacy on the state level while providing micro-relief on the customer's level when they prove they qualify as low-mileage drivers.
A partnership with Ownli gives access to an end-to-end platform designed from the ground up for optimal learning with minimal effort to launch. The Ownli platform provides user-generated data capture, fraud detection, customer support, dashboards, and rewards delivery. At Ownli, our aim is to help Insurers of any size to provide a cost-effective and personalized experience to their customers that they’ll actually want.
Since launching in 2021, Ownli has empowered Insurers to deliver a straightforward PPM solution to their customers that has had wide-ranging positive impacts on multiple business-centric metrics including reduced mileage, improved retention, and growth.
Through our partners, we have observed a 75% nine-month retention with program participants. That is not only nine months of certified unique mileage data from customers but also nine or more moments of meaningful positive engagement where slim to none existed before.
That continuous positive engagement also benefits renewals as in a survey conducted with program participants, over 70% indicated that they are more likely to renew their policy specifically because of the program. Additionally, 88% would switch their insurance company if it provided them the opportunity to earn more with Ownli. As we’ve seen, giving agency to customers over their data and providing small rewards in return for that data can make a significant impact.
For participants, the monthly mileage check-ins provide an opportunity to better understand their vehicle usage through graphs that detail their month-over-month mileage data. As a result, almost 70% of program participants have exhibited a reduction in mileage which can have an impact on overall claims frequency seen through our partners.
Lastly, mileage is only the beginning as 85% requested to add more personal data if they know who is buying it. This appetite to continue to add and earn creates opportunities for cross-selling, up-selling, and bundling of policies.
In order to garner better data from most customers that are not in active telematics programs, Insurers should seek alternatives for these customers. By putting the customer in full control over the collection and use of their data, Insurers can service the majority of customers that can stand to benefit from a PPM program but are not willing to participate in a program with passive data collection.
Ownli offers that alternative with an out-of-the-box solution that customers want and enjoy, making the Ownli PPM solution a win-win for both insurance companies and customers alike.
To learn more and schedule a demo, please visit us here.
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Read moreHave you considered the person behind your customer data? Explore ethical data sourcing with us.
Your personal data is a very valuable asset that you can make work for you. Learn about how you can use it to your benefit with Ownli.
Although not as fun as this dog's birthday party, data parties and their strengths and challenges are crucial to your data and marketing strategies.
Making valuable personal connections with new and existing customers has become increasingly difficult (and costly) over the last few years. Let's explore the reasons why and discuss pathways forward to build trust through transparency.
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