Some insurers allow coverage to be “on-demand,” that is, turned on and off at any time. Who will benefit the most from on-demand insurance?

Global insurance telematics best practices have generated more value through claim cost reduction, changes in driver behavior and a self-selection effect than through pricing, Director Matteo Carbone and Casualty Actuary Josh Taub report, basing the conclusion on the experience of the IoT Insurance Observatory. Noting that a CAS survey finding that a key reason for customer reluctance about usage-based insurance is the absence of a single stable price, the authors review telematics-based insurance approaches that have been more successful than UBI globally.

We believe tech startups have the potential to significantly improve the insurance experience for underserved customers and capture a multi-billion dollar market.