Barriers to telematics adoption ‘beginning to subside:’ LexisNexis

LexisNexis Risk Solutions recently released results of a survey in which more than two-thirds of respondents expressed concerns that telematics vehicle technology could give their insurance carrier too much information.

LexisNexis, a unit of Reed Elsevier plc, commissioned surveys of both consumer auto policyholders and commercial policy decision makers coordinating vehicle fleets.

When asked about “perceived barriers” to adopting usage-based auto insurance (UBI), 68% of consumers said it would give their insurance company “too much information.” However, when the same survey was done in 2013, 70% had expressed the same concern, down from 77% in 2010.

“As consumers become more familiar with UBI, they are increasingly likely to perceive UBI programs as appealing and relevant, and it appears that some barriers are beginning to subside.”

In personal lines, 38% of respondents said they were aware of UBI programs, and 18% “are projected to adopt UBI for a 10 percent discount off their insurance premium,” LexisNexis noted.

The survey was done by a third-party. The consumer respondents were insured drivers between the ages of 25 and 74, while in commercial lines, 409 managers of fleets comprising 2 to 20 vehicles were surveyed.

UBI “currently accounts for” 2% of personal lines auto insurance policies in the United States, LexisNexis said, adding that within five years, However, UBI policies “are projected to capture” 20 to 30% of the market.

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