Insurance Risks Same for Car Subscribers, Research Claims

Insurers are being told the growing trend of vehicle subscription instead of car ownership does not pose any greater risks of loss or damage.

That’s the findings of research by software and data analysts in the US who employed telematics technology to monitor 1,456 drivers across 228,000 driving days of data. The companies Clutch Technologies, an automotive software platform provider of vehicle subscription and mobility services, and mobility and data analytics specialist, Arity, say this is the first major piece of empirical research into driver risk profiles and insurance claims for consumers using vehicle subscription services.

A set of screening technologies was applied during the initial subscription registration process to identify the estimated driving risk of each consumer. Then both companies performed a study to determine how predictions of risk compared to actual performance for these drivers using the subscription service. The research suggests:

  • Joining subscriber risk profiles showed similar distributions to those seen in traditional personal auto insurance;
  • Subscribers then performed similarly to initial risk estimates;
  • Existing screening and risk measurement models from personal auto insurance can be applied to subscription drivers.

Screening technology, combining el identity verification, motor vehicle records, scoring of driver risk, and other behavioral data predictive of risk, can be used to acquire an attractive subscriber base. The study also claims to provide insight into the type of screening and risk evaluation technologies useful for providers of vehicle subscription.

The companies conclude that consumers that subscribe to a vehicle perform similarly to consumers that own or lease a vehicle. The study also suggests that subscription services can attract a ‘safe’ base of regular consumers and the realized losses associated with subscribers is predictable.

Senior vice-president of Arity Data Science, Grady Irey, said: “Having worked for so many years in the insurance industry, I suspected when we first started talking with Clutch that we could apply general principles of personal auto risk modeling to the vehicle subscription use case. We see these findings as a first step and catalyst to connect more mobility providers with insurance carriers and be confident that their drivers will be safe and good custodians of vehicles.”

— Paul Myles is a seasoned automotive journalist based in London. Follow him on Twitter @Paulmyles_


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