It should come as no surprise that consumer interest in usage-based insurance (UBI) programs increased as an effect of the pandemic. More time at home, fewer hours in the car commuting to the office and an overall embrace of digital capabilities were all factors inspiring an uptick in consumers’ willingness to embrace UBI offerings. The idea that “I drive less so I should pay less” encouraged more than 54% of drivers to say they felt comfortable sharing information on miles driven, according to CCC Information Service Inc.’s 2021 Crash Course study.
But now, with public health restrictions being lifted and roadways largely back to pre-pandemic traffic levels, many insurance shoppers may begin to question whether a traditional UBI program is the right fit. While common UBI offerings provide an upfront discount, then measure driving data to determine whether the customer should keep all, some or none of the discount, we at Plymouth Rock believe there is another — perhaps more effective — approach to telematics.
While the traditional UBI model can work seamlessly in the direct-to-consumer channel, it presents unique challenges for independent insurance agents, whose businesses are founded on the promise of “choice.” When a consumer’s driving data determines that the upfront UBI discount is to be removed, an independent agent must deliver the news and, in many instances, feel pressure to quote the policy with other carriers to find the lost savings. We have found this process to be both time-consuming and disruptive, often discouraging agents from offering UBI at all.
As a leading northeastern independent agency carrier, Plymouth Rock Assurance set out to build a different kind of UBI program, one that provided independent agents with a unique selling advantage and that took the potential of lost discounts out of the equation, instead delivering rewards for safe driving. In partnership with Cambridge Mobile Telematics, Plymouth Rock launched the Road Rewards safe driving program in 2018.
The Road Rewards concept is simple: safe drivers earn rewards. The Road Rewards app measures driving behavior like other UBI programs, but instead of a discount, customers earn everyday rewards through their safe driving. There is no impact to premium so customers can start — or stop — participating whenever they choose. With useful items like discounted fuel, free movie tickets and gift cards, customers are encouraged to continue participating and rewarded when they demonstrate safe driving habits.
A rewards-based model can also introduce fun, family competition through product gamification. For example, by offering a family sharing feature, parents can monitor their teen drivers to see how safely they are driving. Through a shared leaderboard, family members can see each other’s scores, trips, and trends, creating the opportunity for family members to compete for bragging rights as the family’s safest driver.
Despite its different approach, the goal of a rewards-based UBI program remains the same: Improve driving behavior to make roads safer for everyone. By incenting customers to make safer choices by offering timely and responsive rewards instead of a one-time potential discount, a broader swath of the driving population is motivated to remain actively engaged over a longer period. That’s what we believe at Plymouth Rock, and why we’re so excited about the potential benefits Road Rewards offers our policyholders.
Mary Boyd is the president and CEO of Plymouth Rock Assurance Corporation. A seasoned senior executive with more than 25 years of applying her diverse set of skills to lead businesses through transformative phases in their history that span invention, renovation, integration and rebuilding. In her current role, Mary is responsible for leading the $900 million independent agency auto, pilgrim services, and umbrella liability business.
Opinions expressed here are the author’s own.
