Building a Business Case for UBI White Paper
UBI works—as a way for insurers to manage risks, evaluate the market, delight customers, and help improve revenues and costs. According to a new report from IHS Automotive usage-based insurance technology is expected to grow from the current estimate of +12 million subscribers to well over 142 million subscribers by 2023.
Our complimentary UBI white paper equips insurers with an understanding of the true business value of insurance telematics and provides a number of proof points supporting the many business cases.
Executive Summary – Building a Business Case for UBI White Paper
With tightening competition throughout the insurance sector, insurers are motivated to find ways to more precisely predict risks, sharpen pricing strategies, and provide better value to their policyholders. Usage-based insurance (UBI) offers a promising means of accomplishing these objectives. Data obtained from real-world deployments and proof points from industry surveys indicate that the benefits of well-designed UBI programs can justify the investment. The expansion of UBI programs around the world shows that insurers are increasingly recognizing the need and benefits and, in response, are launching programs to take advantage of the capabilities.
Before contemplating a UBI program, insurers should be clear about objectives and adopt a strategy well suited to long-range corporate plans. UBI programs can be effectively mapped to the individual market objectives and mission of each carrier by choosing the segments, product features, and data-collection technologies appropriate to each company’s long-term strategy.
As a vehicle for enhancing revenues, reducing costs, and nurturing a steadily growing customer base, UBI counters prevailing trends that show increasing customer dissatisfaction with their insurance companies. UBI provides a number of ways to improve the overall customer experience and to expand communication with customers. Accurate telematics data can reduce the frequency and the magnitude of claims, as well as speed up the settlement process, all of which results in cost savings for insurers. Structuring insurance programs around distinct customer personas, behaviors, and preferences is a proven path toward building a long-term relationship and boosting customer satisfaction.
As regulatory models, technology advances, and competitive programs continue to evolve, engaging with an experienced, knowledgeable telematics service provider (TSP) is essential to understanding the business case scenarios most appropriate for an insurer. A TSP can also help identify the business case best suited to each individual business’s strategy— the necessary foundation for implementing a successful UBI program.
Table of Contents:
- Introduction: Choosing A Strategic Direction
- Primary Considerations For Success
- Aligning To Corporate Objectives
- Complying with Mandates
- Overview Of Trends In The Industry
- Real-World Data and Analysis
- Traditional Versus Dynamic Data
- Projected Market Growth
- UBI Business Case Rationale
- Business Case Examples – Revenue-Generating Opportunities
- Business Case Examples – Cost Savings Opportunities
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