IMS Blog

Millennial Drivers demanding more from Usage-based Insurance (UBI) programs

It is no surprise that when usage-based insurance (UBI) took off; millennials were at the forefront of embracing technology and fully integrating it into their connected lives. Once driven by the prospect of insurance discounts, this younger generation is now looking for more.

Being one of the largest group demographics in North America, millennials believe that UBI can offer more than just a calculation of premiums. Insurance companies have an opportunity to embrace modern technology and adapt their programs to appeal to these drivers – drivers that rely heavily on their mobile devices and access to the internet. Living in a world where everything is connected, having a connected car is the next logical step.

According to a survey by Towers Watson, young drivers have shown willingness to pay for value-added services enabled through UBI technology, services including theft tracking, automated emergency call and breakdown notification service. According to the same survey, millennials are more willing to participate in a UBI program if they can have access through a mobile device (mobile-based UBI). They are driven by mobile technology that records trips, scores their driving and provides them with feedback for improvement. These same drivers (84%) would be willing to change their driving habits if it meant getting a discount. They are looking for ways to measure themselves against others as well as connecting with other aspects of their lives.

There is a great opportunity here for insurers to take advantage of the enthusiasm of millennials, who rely heavily on their smartphones and the internet, to provide more benefits and services such as driver scoring, vehicle health, roadside assistance and weather to their customers. Insurers need to embrace technology and capitalize on emerging trends, using young drivers to boost growth and in turn get greater buy-in from all age groups. Incentives for UBI go beyond discounting and with greater awareness; everyone will become more open to UBI and the benefits.

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White Paper – InsurTech Sparks Digital Industry Transformation

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