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Usage-Based Auto InsurancePublished by: TowerGroup Published: Dec. 1, 2003 - 8 Pages Table of ContentsReport Coverage Introduction Paradigm-Breaking Technology A Progressive Solution
Survey Says . . . Going the Distance
Pay-at-the-Pump Insurance How Much!? Clubbing Down Premiums Other Technological Innovations
Summary AbstractMany policyholders are unaware that there is a different and cheaper way to calculate insurance premiums for automobiles. Aside from promises to have lower rates than a competitor, premiums on average don't vary more than 10% to 15% between insurance companies for the same coverages. While that type of variance can amount to significant savings, the basic mechanism for premium calculation is the same. A different model for calculating premium that originated over 75 years ago is gaining popularity thanks to recent technological advances. Usage-based premium calculation promises to be popular with consumers because of the flexibility and cost savings it provides. Carriers and technology vendors need to be aware of the various approaches to this alternate pricing model and prepare to take advantage of the opportunities it presents.
This TowerGroup Research Note, which will be of interest both to insurers and technology vendors,
explains the basics of these approaches and the technology to support them. |
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