After a muted year for growth in usage-based auto insurance programs, several carriers are rolling out new or reworked versions of their initiatives to take advantage of consumers’ own smartphones or connected cars to collect the needed data.

For the first decade of its existence, usage-based insurance (UBI) was powered by third-party telematics devices that insurance companies provided to customers for installation in their vehicles, most commonly in the OBD-2 port. Now, with telematics technology is embedded in new cars and new mobile phones coming standard with GPS, accelerometer and mobile broadband technology, that’s less important.

“People are moving away from OBD-2-based devices to thinking about how they better digitally connect to their customers,” says David Bassi, executive director for EY. “They’re looking at those alternative methods for collecting the data they need, and how they collect a fuller range of data.”

This new wave of UBI products rolling out also allows the mechanism for collecting the data carriers need to serve as a feedback and interaction point with their customers, creating a better customer experience . While third-party technology isn’t completely out of the picture, most insurers prefer the smartphone-app approach because customers can more easily visualize the benefits of the program, and are looking to build the best product possible through that channel.

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For example, Electric Insurance piloted a fully mobile-based UBI program, using technology from the insurtech Cambridge Mobile Telematics (CMT), in Ohio last year. The successful pilot is leading the company to expand availability to four more states on March 1: Texas, Georgia, Connecticut, and Wisconsin.

“We’ve been tracking and monitoring [UBI] pretty closely for a number of years, and the availability and accuracy of the smartphone data made it possible for us to be part of the space,” says Mike Mucher, VP of sales and marketing for Electric. Mucher says that in its Ohio pilot, Electric was focused on getting feedback on the user experience, reviewing all the touchpoints that it had with customers to see what worked and what didn’t.

“Our product team strategically felt it was important to see how our customers reacted to it as a feedback device, in terms of attempting to make their lives safer,” he explains. “Partnering with a team like CMT, we have smart people looking at the tech and thinking about how to help customers solve a problem.”

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