Usage-based vehicle insurance—all PAYD up and raring to go!

The current UBI landscape is in transition and expanding fast, with insurers identifying and developing the strongest business models, the best value proposition, and the most suitable data capture mechanism as they seek to alleviate divergence with the automotive industry.

Usage-based insurance (UBI), also known as telematics insurance, is a type of automotive insurance that uses real-time information about a driver's actual driving ability and habits to assess actuarial risk. This information is collected via a tracking device, such as a professionally installed black box; an on-board diagnostic (OBD-II) device or dongle; a smartphone; or, increasingly, a car's factory-installed connected platform that connects the car to a local wireless network, enabling data to be transmitted to a back-end server for analysis and assign a driving score for calculation of premium discounts.