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4 February 2014Juan Mazzini
A recent research indicates that younger drivers pay more on car insurance in Chile. Similar scenario made auto usage based insurance (UBI) products very popular in the UK and now we are seeing this trend evolving in other markets such as USA and Canada. Drivers 30 years old or younger will pay up to 30% more for their car insurance in Chile. Some have argued that in Latin American countries the burglary component of the premium is significant while the collision component not so much. This research proves that argument wrong, as the burglary probability is not related to age and therefor the premium should be similar. Certainly collision and damages have been always related to age and would explain this difference, though this generalization makes safe young drivers overpay. Aiming those young drivers, and in some cases looking to influence driving behaviour, auto UBI has increasingly became popular in other markets. Maybe it is the turn for Chile to innovate with an auto UBI offering? Certainly there is a case to try it. Some reports related to this subject can be found at:
Asia-Pacific, EMEA, LATAM, North America