AUTHORISATION

SECTION I
FUNDAMENTALS OF THE UBI MARKET
In fact, today’s insurance telematics does not work for old drivers.
The thresholds on breaking and accelerating are tuned to isolate only impatient or
aggressive driving. Older drivers do cause accidents, but for different reasons.
Also, they drive fewer miles, since many no longer have to commute. The present
models of PAYD and PHYD would need to be entirely rethought and the
hardware solution would also need to be redesigned to apply for this segment.
4. Some of the challenges ahead
Licence
agreement
We surveyed the responses from the insurers we spoke to during the process and
identified the principle motivations and pain points that will be analysed further in
the study.
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When looking at what motivated the companies to start a UBI programme, we
found that improving underwriting and risk selection was by far the most common
attraction. It was closely followed by the need to acquire profitable customers
efficiently. Other gains were the perspective of loss reduction (in Europe and
South Africa mostly), improvement in customer relationships and being seen as an
innovator.
The cost of the device, data analysis and transmission
is still too expensive for Russian insurers.
Even international companies that have Russian subsidiaries
as Allianz, Zurich or Liberty Mutual do not believe in
telematics insurance in Russia.
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BBBB
When looking at the key hurdles in
the implementation of a UBI
programme, the responders saw
reaching profitability a n d
gaining customer acceptance as
most problematic. Getting the
offer’s pricing right and reducing
cost came second. Making the technology work, collecting the right data and
selling was seen as less of an issue.
In fact, the costs of the investments needed were often picked up as the main
barrier to development and implementation. It was not highlighted as a
prevention to doing business altogether, but as preventing from attracting specific
segments and market.
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employees. Distribution to third
As a response, most of the respondents where
looking at or already working on sharing
those costs with external partners. In practice
w e h a v e s e e n t h i s h a p p e n i n g w i t h
independent OBD dongle providers and to a
parties is prohibited
The installation cost is an
issue. In Germany, installing the
black box costs about €80-100
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