Insurers know that in order to drive demand for insurance products that offer greater value, build trust with policyholders and provide rich, engaging experiences, it’s necessary to offer more personalized insurance programs and services to policyholders. Such programs that have seen tremendous reinvention and resurgence are mileage-based insurance telematics programs.
Mileage-based (Pay-per-mile) car insurance programs are regaining traction with insurers who are looking not only to compete, but thrive in developing innovative insurance telematics offerings in a mature market. Mileage-based programs are often referred to as the Pay-As-You-Drive model, a model where policyholders pay based on how many miles they drive. In the past, mileage programs simply collected data on a policyholder reported mileage. More personalization and new technology developments are now enabling these programs to vary greatly with respect to mileage context used, rate determination and billing model. As a result, they are quickly generating new interest as well as capturing market share.
Mileage-based Program Scenario Example: A policyholder can be charged a flat rate fee every month based on typical insurance costing factors plus an additional fee per mile driven, up to a certain number of miles after which point they may not be charged. Alternatively, they can pay for insurance by purchasing blocks of miles, similar to how consumers pay for prepaid cellphone fees.
Mileage programs offer auto insurers a number of benefits – they are quick to implement, offer more transparency and provide policyholders with options for insurance that meet their lifestyle needs and values. What is more, they also help increase policyholder retention and encourage safer driving through behavior-based coaching. In fact, research shows that telematics programs overall increase policyholder retention by 18 percent – 20 percent through regular engagement and driving feedback.
It’s no surprise that insurers are already re-thinking their insurance program portfolio and adding new mileage-based insurance programs as available offerings to their book of business. For example, our mileage-based client Amica Mutual Insurance Co., a top 25 automotive insurer in the United States, announced the introduction of a mileage-based program called FlexMile which allows policyholders to purchase a set number of miles up front and lock in a rate good for up to 3 years. By doing so, they are able to offer flexible, personalized and innovative programs that deliver unique and engaging experiences demanded by policyholders, which also help better control claims ratios and costs for the insurer. Learn more about Amica Mutual Insurance Co. Mileage-based Program.
Below is a breakdown of the different pricing structures that can be implemented in a mileage-based insurance telematics program, starting with a traditional “Basic Rate” pricing structure, followed by a “Personalized Rate” and finally, a more comprehensive “Variable Mileage Rate”:
In addition to the flexibility and personalization around pricing structures available, a variety of billing options also exist ranging from a traditional “Prepaid Mileage” plan to “Post-paid Recurring Billing” and finally, “Post-paid Ad-hoc Billing”. Here is a detailed breakdown:
IMS UBI Intelligence delivers on the promise of being the premier, most complete UBI solution, offering a one-stop shop for an insurer’s UBI needs – no additional suppliers or multiple partners to work with.
Mileage-based Programs (also referenced as):
One-stop shop for program needs
IMS UBI Intelligence offers insurers a single source provider for all their UBI program needs, including hardware, logistics, support, secure data warehousing, data analytics, driver portals and more. No need to deal with multiple suppliers and partners.
Fully Customizable Solutions Without Sacrificing Speed to Market
IMS UBI Intelligence provides the best of both worlds: 1) a turnkey approach to improve time-to-market while also 2) being customizable to branding and program requirements.
Value-added Services for Future Revenue Opportunities
IMS UBI Intelligence is powered by DriveSync® – IMS’ connected car platform – providing insurers the ability to roll out future revenue-generating services to current customers. Examples of value-added services include: infotainment, roadside assistance, vehicle health and more.
Ability to Offer Differentiated and Segmented Programs
IMS UBI Intelligence provides solution options so insurers can create targeted, differentiated programs for specific audiences and geographies.
The Best UBI Experts in the Industry
Access to a team of subject matter experts with the experience and best practices developed by working with numerous insurers around the globe.
Flexible and Scalable Architecture
IMS’ award–winning technology services platform is future-proofed for years to come and offers an unmatched solution that will help ensure the success of your UBI program in today’s competitive marketplace.
As the only true data source agnostic solution on the market, we work closely with you in choosing the right technologies to adopt to ensure you achieve your growth goals and potential. We make the whole process of a successful launch as simple and easy as possible.
Use of mobile as sensor, either through white label app or SDK in 3rd party app
Dashboard / windshield mounted battery-powered device
Dongle plug-in for OBD port
Direct feed / line fit from on-board computer
All the tools you need to manage and administer a successful pay-per-mile insurance program.
Programme administration and reporting
Actuarial Grading Score
Scalable customer support options available to support program growth
Dedicated assistance with training, adoption and retention plans
Operational assistance, including forward/reverse logistics, provisioning and enrolment
Seamless integration with external applications and corporate systems
Scalable IT architecture with data warehousing and security
High quality intelligence and visualisations for insurers and end-users
One deployment, using the IMS DriveSync platform, can support both sides of your insurance business – personal lines and commercial lines users.
Flexible technology options to support programs
Post-trip driver behaviour, scoring and coaching tips
Communication for driver relationship management
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