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My experience of UBI: some insurers are simply missing the point
I have been analysing the UBI market for about 10 years and believed every programme would take the opportunity to connect with their customers and use driver scoring to give feedback, therefore keeping the customer engaged and reducing risk.
I started to drive again 2 years ago and decided to take out a UBI policy for my 2005 Honda Jazz, both as an experiment and in response to the promise of lower premiums. The reality of participating in a UBI programme has been an eye opener. Over the last 10 years I have discussed with hundreds of insurers, TSPs and technology providers about what to expect from a UBI programme. To put it mildly, my own experience has fallen short of what I expected and what has often been described to me as best practice.
I am not a young driver, but only recently purchased a car and so, with no NCD to my name, I conform to the typical target market for most UBI apps and box programmes in the UK.
For the first year, I signed up for a smartphone, app-based UBI programme. It worked well. The app was basic and very easy to read. I really liked the trip logs / rating and we got small rewards for 10/10 driving each week which made my wife very happy – the reward was good quality chocolate. As a result, we both remained fully engaged with the app for the duration of our policy and would have been more than happy to continue with the policy for another year.
Sadly, one week before my renewal was due, the insurer sent me a letter saying they would no longer offer me insurance, without any explanation. Considering the amount of chocolate I received, I was of course offended, but decided to consult an aggregator and chose a black box solution instead for the next year. Great opportunity to compare the models!
Having been used to simple and personal email copy, the following communication (never signed by a human) came as a bit of a shock. Very long, unreadable emails kept informing me about new products but never my policy. The welcome email only had a link to “access my documentation”.
For a while I thought I would receive a link to an app at some point, maybe a reminder to look at my score? But nothing ever came. Six months down the line, I actively searched for the scoring information. Went through all the emails and registered on the website with everything I had.
That is when I realised the initial email with the, ‘Register to view your documents’ link was in fact the only means to access my (very limited) driver dashboard. Once on the dashboard, the experience is far from user friendly, with an experience more akin to internet banking or airline booking websites, with links frequently expiring and the inability to use the back button. This has the effect of adding more friction to an already cumbersome and lengthy login process. I have also found the service itself is frequently down or unable to show my score:
As someone working in the UBI industry, it is safe to assume that my interest in my policy and use of my personal dashboard is above that of the average driver. Giving the conditions, I suspect nobody will ever make the effort to consult this programme’s dashboard .
I have also closely monitored the communications received from my insurer and recorded the following results:
For a service which should surely encourage users to view their dashboards on a regular basis, this strikes me as very poor execution.
In terms of value proposition, since I bought the policy through an aggregator, I received no information on discount, whether it is at renewal or indeed if there is one at all. Without any communications concerning my driver score there are absolutely no incentives to drive well or remain with the insurer at renewal.
No scoring information, no engagement, poor and impersonal communications of any kind and no incentives: I have begun to wonder whether this is in fact a UBI policy at all! Yet, someone did come to my car (less than a week after I signed up) and I watched him fit a top of the range device inside my dashboard.
My conclusion is that if you think UBI is costing you too much to run, maybe you should act beyond the installation phase. A lack of engagement, lousy communication and poor online tools not only partially negates the investment in telematics for the insurer itself, but also creates a very negative impression of PHYD as a concept. I can now see why young drivers in the UK cannot wait to graduate away from telematics!