More than half of small fleet managers are likely to stay with their current insurance carriers rather than switching if their insurer offers usage-based insurance (UBI) programs, according to a new survey by analytics firm Lexis Nexis.
If an alternate carrier offered a fully-loaded UBI package, which includes insurance at a 10 percent discount and fleet management services, more than half of the respondents said they would be likely to switch carriers.
The 2015 Commercial Usage Based Insurance Study also found that 25 percent of commercial fleet managers of all sizes would enroll in UBI, but current usage rates are only at six percent.
“There is a significant gap between the estimated demand for commercial UBI and current enrollment rates,” said Deke Phillips, director, Commercial Insurance, LexisNexis Risk Solutions. “This indicates a substantial market opportunity for insurance carriers to raise awareness and eventually adoption, especially with small fleets of two-to-five vehicles. ”
Phillips said insurers can benefit from more insight on the driver and drivers themselves can improve their driving as a result of the feedback.
Specific findings include:
- Estimated demand for commercial UBI among 2-5 vehicle fleets is at 24 percent.
- Estimated demand in small fleet commercial UBI is 10 percent greater than that of consumer demand, consistent with last year’s findings.
- UBI also has the potential to be a strong retention and acquisition tool for commercial insurance carriers according to the findings. Sixty percent of small fleet managers said they would be less likely to switch insurance providers if offered UBI with a 10 percent discount.
In its 2014 survey LexisNexis found that cost savings is the number one factor in fleet managers’ decision to incorporate UBI into their small commercial fleet. Small fleet managers also value services such as stolen vehicle tracking, fuel consumption/efficiency updates and automatic emergency crash response, the 2014 survey found. Commercial fleet managers said they were also receptive to mobile UBI technology and 73 percent said they have smartphones.
LexisNexis Risk Solutions conducted a blind, web-based survey. Respondents were managers of fleets comprising 2 to 20 vehicles covered by a commercial auto insurance policy.
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