Assistant Professor, SGH Warsaw School of Economics
The main objective of the book is to assess the potential consequences of the use of insurance telematics to reduce the effects of information asymmetry on the Polish market of compulsory motor insurance. The conducted research consisted in describing the expected behaviour of the models of the mandatory motor insurance market in relation to different systems regarding the use of telematics by insurers
Did you know that 75% of the insured who would allow the possibility of concluding a UBI type contract at all would expect a discount of up to 30% of their current premium? While a maximum of 15% discount relates to as many as 37,45% of the respondents. The factors like gender, age, education, and place of residence of the respondents influence the level of expectations.
This study aims to explore the motor insurance market’s attitude towards usage-based insurance (UBI), and thus its readiness for a launch in the near future. Data on client perception was collected using a structured questionnaire. On the basis of this, an initial selection of factors, other than income, that could influence the declared attitude of drivers was demonstrated showing that it is primarily dependent on certain demographic characteristics like their age, sex, or place of residence.
This chapter shows the possibility of introducing the usage-based insurance (UBI) for the sake of the individualisation of compulsory motor Third-Party liability insurance premiums with the aim of achieving the stability in Central and Eastern European markets and bringing them closer to the state of equilibrium. The chapter presents both the historical perspective of UBI development and the summary of the research carried out over the last decade.
The research assesses expectations regarding the amount of discount in insurance premium, which could compensate insured for loss of privacy should it transpire that one’s driving style is to be monitored. A preliminary selection of factors that may affect the expected level of discount has also been made and shows that this discount level may well depend on the views of the insured to insurance telematics and some demographic characteristics, such as gender, age or place of residence.
Motor insurance in Poland plays a dominant role in the portfolios of most insurers. At the end of 2016, it accounted for a total of 60.27% of the direct gross written premium of non-life insurance sector, with the share of motor third party liability insurance (MTPL) accounting for 36.2%. Fierce competition and the diminishing diversification of the offer on the motor insurance market led to significant decreases in the margin, and hence, the income of insurers. Year 2016 brought the biggest loss ever. The technical loss of MTPL has remained in this segment for many years since 2007 and at the end of 2016 exceeded PLN 1 billion.
The paper shows that thanks to the Usage‑Based Insurance, the industry can minimise the negative effect information asymmetry has on the Polish motor insurance market. Through an economic analysis, the author gives the forecasts of the market models where three strategies for telematics implementation are used.
Although insurance telematics may be a source of competitive advantage, the Usage-Based Insurance (UBI) is still an insufficiently explored area, especially in the context of the Polish insurance market. Accordingly, the main purpose of this paper is to facilitate a better understanding of the topic through a review and summary of selected literature and research achievements, which may prove useful in a discussion about domestic UBI.