Travelers looks to expand UBI customer base with new mileage-based product

Travelers is piloting IntelliDrivePlus, a pay-as-you-drive usage-based auto insurance product, in Ohio, Nebraska, and Arkansas.

The new iteration of the existing IntelliDrive product line comes at a time when auto insurance rates are expected to tick up while consumers are getting more comfortable with telematics overall.

“We did some research and [consumers] are interested in that additional control over how much they pay for their insurance and it's intuitive to them that telematics helps deliver that,” says Karen Andrews, AVP of telematics and emerging auto at Travelers.

Like the existing pay-how-you-drive IntelliDrive product, Plus uses a mobile app with technology from Cambridge Mobile Telematics. (Travelers was using TrueMotion technology at the time it was acquired by CMT and has continued to use the platform.) The new iteration, however, takes miles driven into account and also has more continuous monitoring of driving habits. For drivers that view themselves as safer and lower-volume, this provides additional opportunities to lower their car insurance premium, Andrews says.

But Travelers is also not trying to compete only on big sign-up discounts. When IntelliDrive customers complete their onboarding process, the sign-up discount is replaced with the driving profile discount – which can be more or less than the sign-up, depending on how the driver did. The Plus iteration allows more opportunities to change that discount for the better.

“It's going to continue to monitor your behavior and your mileage, and it's going to take changes in that and apply them,” she explains. “ I think that that's appealing to a little bit of a different population. If you're interested in improving your driving and becoming a safer driver this is a great program for you. If you're a low mileage driver when you have an app in the process that can keep track of that and incorporate it at renewal, that's another win from a customer perspective.”

After years of commoditization driving prices down, auto insurance prices are expected to rise this year. Many insurers see this as an opportunity to increase adoption rates for UBI and telematics in the U.S., which have typically been low. Travelers is among those carriers.

“We’ve spent a lot of time, given that we are predominantly retail and traditional agent distribution, working with our agents and our partners to show them the benefit of these programs and how they can benefit, from an agent's perspective,” she says. “We make it available to our agents as another tool from a renewal review perspective. They know that this is available and they should be leveraging it in those moments with their customers."

In addition to reaching agents, there’s also more opportunity for insurers to reach out to existing customers to try to transition drivers from traditional auto insurance to Travelers’ usage-based offerings, rather than having customers jump to a new carrier to enroll in this new type of coverage.

“We’ve also spent a lot of time making sure that these offerings are attractive from a price point standpoint. In addition to enrollment discounts that we're providing, we're also introducing or have introduced a digital auto discount that provides an additional level of discount when you are enrolled in a telematics program, and signed up to go paperless with us, and enrolled for our MyTravelers program,” she says. “With auto insurance pricing, we're going to be experiencing some challenging times in the next year or so. So this is a really nice way to kind of help offset some of those additional rates.”