The obstacles to faster UBI growth are at least threefold:

Buying a standard auto policy requires very little of the insured, beyond checking boxes on an application. Taking on UBI, on the other hand, means having to install a new device in your car or figuring out how to activate one already included by the manufacturer. The alternative of simply downloading an app may overcome such objections (if that option is available), but that also makes the coverage dependent on everyone driving the car putting the app on their mobile device and registering with the program. Meanwhile, if there are any problems installing or activating the technology, aggravation is likely to ensue for the consumer, as well as the unfortunate agent or customer service rep who fields their complaint.
As noted by symposium participants, people generally don't ask their agent or carrier for UBI unprompted. They need to be sold on the idea. The logistics and value proposition must be explained to them. Those are extra steps for agents selling auto insurance, where commissions are already relatively low (especially for UBI policies, which usually start with a substantial discount to attract new prospects). As for consumers buying coverage direct online, without an agent to force the issue or explain the nuances, UBI adds a level of complexity to an otherwise straightforward transaction.
There may yet be reliability issues with the technology itself. For example, I heard at the symposium that if a driver goes under a bridge or overpass, the telematics monitor may register that as a hard stop, possibly deducting points off the policyholder's score.

Bright spot on the horizon

Ultimately, resistance to UBI could come down to drivers considering the whole package and simply asking, who needs the hassle?

Special Reports /

Should UBI remain a niche auto insurance market?

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