When it comes to usage-based insurance (UBI), data quality is king. Usage-based insurance apps can deliver a lot of valuable information, but only if that information is properly filtered. Without data filtering, UBI driving scores can vary by up to 47 percent. This whitepaper explores the importance of data quality in UBI programs and shares the keys to ensuring your UBI data is good data.
UBI, or insurance telematics, refers to the practice of recording, sending, receiving and storing information about driving behavior for use within an insurance program. In the U.S. in 2014, LexisNexis ® commissioned a third-party research study and found that consumers are as comfortable with sharing UBI driving data as they are with using online banking or sharing information over social networks. In event of an accident, they are even more comfortable with sharing UBI driving data .
Typically, UBI is positioned with customers as an exchange of driving data for discounts in premium or value-added services, such as free roadside assistance. LexisNexis has found that by including key emergency or safety features, insurers can offer a lower discount while still capturing the same market share.
As the UBI market matures, technology has shifted toward lower-cost data sources. Compared to hardwired devices and OBDII hardware, smartphones are a low-cost, low-risk means of obtaining UBI data. Equally compelling is their ubiquity. In fact, 66 percent of UK adults have a smartphone.