(Image source: Location World homepage.)
Location World (Quito), a regional provider of telematics solutions for the automotive industry and insurers in the vehicle industry, announces that it has launched a usage-based insurance (UBI) for Latin American auto insurers. The solution is designed to enable insurers to offer pay-as-you-drive or pay-by-kilometers-traveled services by which insurers can offer policyholders benefits and rewards for good driving habits.
The platform integrates several technology components, including advanced connected car/telematics devices, mobile applications for drivers, advanced data processing and analytics, and what the vendor calls a sophisticated real-time pricing system for the new business models enabled by the solution
In a study published April 2018, McKinsey & Company reports there are currently about 10 UBI programs in Latin American region, and more than 150 worldwide. Penetration of UBI in countries such as Italy is around 17 percent, followed by markets such as South Africa and the United States with 10 percent. Location world says that the current state of adoption represents a significant opportunity for the development of the UBI market in the Latin America region, given the low penetration of vehicle insurance, bordering on 30 percent on average.
Improving Driver Scores
“The main objective of these programs is prevention, since the essence of this type of program is to provide instantaneous feedback of the driving habit to the user, as in the case of sudden accelerations, sudden stops, or events related to excess speed,” comments Antonio Morales, CEO, Location World. “Several studies have determined that the drivers with a higher rate of interaction with this type of application on their smartphone—that is, the people who interact with this type of application—tend in a period of to reduce excess speed by 21 percent between three and six months, and within a year to improve their driving score by an average of 40 percent.”