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The other auto insurance telematics shoe drops: who wants to be adverse selection lunch for Progressive?

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Celent have reviewed this profile and believe it to be accurate.
2015/03/27

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  • […] you could say that telematics is hot, and all personal and commercial insurers writing auto insurance are scrambling to build market share. That is true […]

  • […] you could say that telematics is hot, and all personal and commercial insurers writing auto insurance are scrambling to build market share. That is true […]

  • […] adopters (such as Progressive) could realize the benefits of better risks.  And, as Celent’s Donald Light points out in a recent blog post, those that take the higher risks at a lower premium would, on average, be the recipients of […]

  • I have a different take. When this pattern evolves, ideally Progressive will have (or is expecting itself to have) only good drivers, and the discounted pricing should take care of the bottom-line, with the exit of bad drivers.
    Charging higher premium will result in shifting customer base (and hence risk profile), but the intent of discounting should be to convert bad behavior to good. With the current set up, bad driver has an incentive to change driving pattern because of potential discount; with the proposed set up, behavior won't change! Short term impact: re-distribution of risk profile and bottom-line increase; long-term impact: hit in top-line, if different model is followed by competitor (for reward/punishment).

    This is not to say Progressive shouldn't invent. They are the geniuses of UBI!