Towers Watson consumer survey shows Canadian market is ready for widespread UBI adoption
TORONTO, April 2, 2014 /CNW/ - Canadian drivers say they are unmistakably open-minded about purchasing usage-based auto insurance (UBI) policies, or "pay as you drive" insurance, according to a new survey by global professional services company Towers Watson (NYSE, NASDAQ: TW). Towers Watson's UBI Consumer Survey results are fairly consistent with other global markets and a clear indication that UBI is gaining momentum in the Canadian marketplace.
Significantly, well over half (56%) of Canadian drivers said they have a strong interest in buying a UBI policy. Drivers' acceptance of UBI programs deepens when they are asked to consider the possibility of enrolling in UBI programs. An overwhelming majority (85%) said they would be open to such programs, and that percentage increases to 94% should insurers guarantee that drivers' premiums will not rise.
"The Canadian UBI market has quickly developed into a rapidly changing landscape," said Robin Harbage, global lead for Towers Watson's UBI practice and DriveAbility® service offering. "Until recently, UBI in Canada was limited to just a few programs, but over the past year new entrants have entered the marketplace and increased the range of products available."
The survey also assessed consumers' take on value-added services, which can be bundled with a UBI policy and enabled by the underlying technology. Nearly two-thirds (65%) indicated they are willing to pay for these services, and when asked which services appealed to them most, drivers chose vehicle theft tracking (86%), automated emergency call (85%) and vehicle wellness reports (79%). Drivers said they would be willing to pay for these services, as well, with 56% prepared to pay between $3.75 and $7.50 a month.
"Canadian drivers' indication that they acknowledge the usefulness in purchasing UBI-related, value-added services is an important signal to insurers," said Harbage. "These services can help insurers differentiate and de-commoditize their products. They can also help them focus on a brand-new consumer base to grow new business and improve retention."
Notably, nearly half (48%) of the respondents said they would be willing to change their driving behavior if UBI technology was installed in their car. When asked how, sticking to the speed limit (65%), keeping a safe distance from other vehicles (45%) and driving more considerately (45%) were the top changes.
Consumers said their primary concern with UBI revolved around the possibility that their premiums might increase (47%). Privacy issues were another leading worry, with specific misgivings about the sharing of consumer data (46%) and apprehensions around using data to invalidate claims (46%). "These concerns, while understandable, are not really significant enough to hinder the many benefits that UBI offers drivers," said Harbage.
The results of the UBI Consumer Survey will be discussed in depth at the Insurance Telematics Conference in Toronto on May 28 and 29.
About Towers Watson
Towers Watson (NYSE, NASDAQ: TW) is a leading global professional services company that helps organizations improve performance through effective people, risk and financial management. The company offers consulting, technology and solutions in the areas of benefits, talent management, rewards, and risk and capital management. Towers Watson has more than 14,000 associates around the world and is located on the web at towerswatson.com.
SOURCE: Towers Watson
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