Blog by Adam Clarke, Chief Underwriting Officer at Ageas

Blog by Adam Clarke | Chief Underwriting Officer and Executive Champion for ESG at Ageas Insurance.

Earlier this year I wrote a blog about what’s driving the demand for usage-based insurance.

It’s reassuring that, since then, there’s been further corroboration of my view that desire for this type of policy is on the rise.

Research by Duck Creek Technologies has found that nearly 60% of drivers have a strong interest in usage-based insurance policies. And the number of people making the switch to By Miles’s pay-by-mile policies has risen by 125% since the start of 2020.

But, as we all know, there’s a big step between wanting to make a change and actually doing it. At Ageas we call it the say-do gap.

So how do we help customers cross that gap and make the move to usage-based policies?

It’s a question at the forefront of my mind, both as an insurance underwriter and a driver.

My partner and I are using our second car less and less. Like many people across the UK, we’re not commuting as much because the companies we work for have been brilliant in embracing hybrid working.

We’re driving less outside of work too, as our desire to reduce our carbon footprint coupled with the rising cost of fuel means we’re thinking twice about whether we really need to get behind the wheel to get to where we’re going.

That said, we’re not quite ready to get rid of our second vehicle yet and so a usage-based insurance policy seems the way to go.

And yet, as I told delegates at the recent Insurance Post Motor and Mobility Conference, we felt a little out of our comfort zone when shopping for a usage-based insurance policy.

I’m sure we’re not alone and I believe the key lies within something we’ve always sought to do at Ageas – simplifying insurance for customers.

By making it easy for customers to make the switch from traditional policies to pay by mile propositions we can break down the perceived difficulty of purchasing usage-based insurance.

By clearly explaining to customers how these policies work we can help them understand that these policies are about carrot, not stick. They’re there to reward drivers for travelling less, or driving safely.

Purchasing extra miles is an option on many policies and once drivers are reassured that a drone isn’t going to appear out of the sky firing lasers at their car if they’re a couple of miles over what they purchased, trying to predict annual mileage will become less daunting.

The technology is becoming increasingly easy to engage with and the transition from black boxes to apps is already making a real difference. Once people realise it’s as easy as downloading an app I think we will see more people moving across.

Of course proposition is key and we as insurers and brokers need to get that fundamental right to meet our customers’ evolving needs. By developing our usage based polices founded on solid data and an understanding of our customers’ habits and risks, we can shape policies that give good value all the time and brilliant service where it matters.