Over the past couple of years, we’ve witnessed new consumer interest and willingness to participate in usage-based insurance programs.
A 2020 survey by Bain found that 56% of consumers were likely to purchase UBI in the future, stating pandemic-era economic uncertainty and price sensitivity as key drivers for this shift.
While the UBI opportunity is bigger than ever, there’s still exists an industry-wide struggle among auto insurers to get these programs off the ground, communicate their true value to policyholders, and scale them successfully. Insurance Business America recently noted that “UBI has only 5% market penetration but 85% of millennials say they’re open to these programs.”
Countless telematics programs have failed to break through the glass ceiling for a variety of reasons, from onboarding friction to expensive hardware, cookie-cutter strategies, evolving consumer preferences, and more. Today, the right formula exists for auto insurers to ensure highly scalable adoption (as achieved by our partners, Credit Karma and Progressive, after launching the Karma Drive program via Zendrive in 2020).
These solutions work hand-in-hand to create a unique UBI engine primed to accelerate and strengthen the market, and further digitize an industry stuck in telematics of the past.
Today, traditional risk factors like credit scores aren’t powerful enough to ensure fair underwriting and segmentation. At the same time, customer acquisition costs demanded by traditional auto insurance marketing and advertising methods aren’t sustainable in the long term - given the steep costs incurred, these methods are seeing a limited payoff.
Enter: Zendrive’s ultra-preferred risk acquisition solution, powered by our Mobility Risk Intelligence platform. A must-have missing component to making UBI scalable, this solution allows insurers to offer personalized quotes to safe drivers based on their actual driving behavior.
Through an extensive network of app publishers, insurers offer their prospects - millions of app users - an embedded digital test drive experience. Driving data is collected over a one-month test period, and based on their specified scoring criteria, insurers can acquire new preferred risk - and keep current customers happy and loyal - by offering fairer, be prices.
Succeeding with usage-based insurance in today’s market involves investing in the right program that’s not only accurate, based on massive amounts of driving data, but also tailored to current consumer preferences.
When Zendrive’s ultra-preferred risk acquisition and UBI solutions work in tandem together, the opportunities are seemingly endless for both insurers and their customers. Let’s take a closer look at the benefits of this joint proposition.
Don’t just take our word for it.
Our partner, Credit Karma, is riding today’s UBI wave the right way. According to Rory Joyce, General Manager of Credit Karma Auto, the company is “uniquely positioned to accelerate in [the UBI] market” and fill the large gap between those who are interested in UBI, and actual UBI market penetration.
Credit Karma is primed for that success in part because it trusted Zendrive’s ultra-preferred risk and UBI solutions. In late 2020, we partnered with Credit Karma and Progressive to launch the Karma Drive program, which rolled out in early 2021. The program allows Credit Karma members in 42 states to save more on auto insurance with data-driven digital test drive experiences.
Based on their driving score, users can qualify for savings, as well as receive feedback on their driving behavior that leads to safer driving overall. Since its launch, hundreds of thousands of Credit Karma users have already opted into Karma Drive.
“Karma Drive delivers on our vision to bring transparency, fairness, and accuracy to our members’ auto expenses with an easy opportunity to potentially save money on their auto insurance. Plus, it might even help them become more aware of ways to be a safer driver.”
- Rory Joyce, General Manager of Autos at Credit Karma
The time is now for auto insurers to invest in the right UBI program. But to ensure these new programs don’t follow the footsteps of telematics’ past, it’s important to invest in preferred risk acquisition and UBI solutions that are altogether reliable, accurate, affordable, customer-centric, and, in turn, highly scalable.
Ultimately, scaling and succeeding with UBI isn’t just about finding the best drivers - it’s also about continuing to refine these leads over time, and engaging with prospects and policyholders through embedded experiences across the entire customer journey.
That may seem like a tall order, but it’s entirely doable following the Zendrive recipe.