There’s good news for insurance companies that offer usage-based insurance (UBI) options to their commercial customers: according to a new survey of nearly 500 fleet managers in the United States, more than half of all respondents said they would switch insurance providers if they were offered a “fully loaded” UBI package.
The survey was carried out by LexisNexis and included in the firm’s 2015 LexisNexis Commercial Usage-Based Insurance Study. The survey found that 58 percent of respondents – all of whom were American – would switch from their current insurance carrier if a new provider offered them a UBI package consisting of a 10 per cent premium discount, fleet management services, and the technology of their choosing.
The survey also revealed that there’s a lot of room to grow in the UBI market. Specifically, it found that only six percent of all commercial fleet managers currently use a UBI program – even though roughly one in four said they were prepared to sign up for such a program right away.
“There is a significant gap between the estimated demand for commercial UBI and current enrollment rates,” noted Deke Phillips, director, Commercial Insurance, LexisNexis Risk Solutions.
“This indicates a substantial market opportunity for insurance carriers to raise awareness and eventually adoption, especially with small fleets of two-to-five vehicles. More insight into the driving behavior of commercial drivers will benefit insurers by knowing the risks on the road, and driver feedback methods have the potential to improve driving and positively impact everyone on the road,” Phillips added.
Given this gap between the number of commercial fleet managers who want UBI programs and the number who actually use them, LexisNexis says it’s time for “new marketing tactics” designed to “grow awareness of commercial UBI”.
“The low awareness of fleet management services among smaller fleet managers suggests that education and proper positioning of fleet management benefits will be required before smaller fleet managers see the value of such services – and accordingly before they perceive fleet management services as a value-add to commercial UBI,” the report concluded.