Brokers and insurance companies are very likely to turn to usage based auto insurance (UBI) telematics, but one mutual provider says brokers are telling it customers are uneasy about insurance companies monitoring their road use.
Speaking to Canadian Underwriter last week, Wawanesa Insurance chief strategy officer Carol Jardine said “Our brokers are advising us that our customers are not fans of telematics.”
Usage based insurance allows customers to potentially cut their premiums drastically by allowing insurers to monitor their driving behavior and reward them for good driving practices. In the UK and Italy, where UBI has been adopted successfully, drivers receive discounts for good behavior, a model Canada will certainly adopt.
There is a concern that drivers will not want to be monitored and will not adopt UBI coverage. In other countries, insurers have found motorists will handle the unease of being monitored if it means lower premiums. However, Wawanesa’s claim suggests customers in Canada may need more convincing.
“Our customers that buy from our brokers do not wish to have a telematics device installed in their car,” Jardine said. “Whether they are concerned about privacy, or monitoring of their driving behaviour, lots of people don’t like telematics and our brokers are telling us that the customers who like telematics are not the customers of our brokers.”
The Insurance Brokers Association of Ontario (IBAO) became the first to offer UBI in 2013, under a partnership with Ingenie Canada offering products underwritten by Aviva Canada. However, in 2016, IBAO president Traci Boland admitted the market was not ready and the product is no longer available.
“I just don’t think the marketplace was at the right position for that product at the time,” IBAO CEO Colin Simpson said recently. “I think it was the right thing to do at the time because it brought a lot of attention to the use of data, the role of the broker, but as technology advances, then you really need to be a specialist in that field to be able to be effective at it.”
Since the IBAO backed product, several other insurers have started UBI programs, including The Co-operators.