Until now, U.S. insurers have intentionally restricted the impact of their telematics programs by holding riskier drivers harmless. In other words, insurers told policyholders entering into their telematics programs that their premium could only go down or remain the same. Higher risk drivers' premiums would not be increased even if the telematics device revealed driving behavior that actually warranted a higher premium.

But now the world has changed.

In its 2014 annual report, U.S. telematics leader Progressive dropped a bombshell that it is "affording more customers discounts for their good driving behavior while for the first time, increasing rates for a small number of drivers whose driving behavior justifies such rates" (Celent emphasis). A Progressive representative estimated that about one-fifth of all Snapshot drivers may see a rate increase.

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