Most middle market business owners are more interested in vehicle telematics insurance products than their agents realize, a dynamic that reveals a significant opportunity to sell the technology more aggressively, Nationwide found in a new survey.
Approximately 14 percent of agents responded that they don’t believe their clients would pay for telematics. At the same time, 93 percent of businesses said they’d buy it to enable safer driving. That customer interest comes as 64 percent of agents said they’re knowledgeable about both vehicle telematics devices or telematic smartphone apps.
“In addition to managing their business, many middle market business owners face the added concerns related to the safety of their drivers and fleet vehicles,” Pete Frey, director of Commercial Lines Telematics at Nationwide, said in prepared remarks. “The results highlight a tremendous opportunity for carriers and agents to change the conversation around telematics from being a nice ‘add-on’ perk, to what it really has become – an essential tool for operating a fleet-focused business.”
Other results highlight the agent/client disconnect on the telematics issue. According to the survey, 70 percent of business owners said they’d pay between $20 and $39.99 per month per vehicle to add telematics, but 60 percent of agents said they think clients would pay $29.99 or less per month to add the technology.
Frey added that carriers must also be part of the equation in promoting telematics to clients.
“Consider a carrier’s role in the sales or account review processes,” Frey said. “In some cases, connecting a client directly with loss control or product experts can offer additional expertise to help guide the customer and allow you to focus on other ways to serve them.”
As well, agents said they believe distracted driving is the top cause of accidents. But business owners see driving under the influence, driver error, road conditions and weather as the big causes of accidents for their fleet vehicles.
Frey said the result show agencies should reconsider the resources and support they provide to their team members, so they can better market telematics with clients as part of insurance coverage.
Among other findings of the survey:
- 94 percent of business owners said telematics help protect their employees on the road.
- 91 percent of business owners said telematics has positively affected their operations.
- 45 percent of business owners believe telematics stop accidents and insurance claims from happening in the first place.
Business owners see telematics as helping to track locations of their vehicles, evaluate their drivers’ behavior on the road, and also helping to spot troubling vehicle conditions in order to avoid expensive repairs. Another plus on the customer side: a large minority of businesses said telematics offers a strong risk mitigation strategy for their business.
Still, there aren’t all raves for telematics technology. Just under 80 percent of agents said they believe their clients are hesitant about telematics because of privacy concerns. About 37 percent of business owners agree with this sentiment. About 83 percent of business owners said they thought telematics data could spike their insurance rates. As well, a large minority of business owners said that the cost of telematics technology and the time to install it would be prohibitive.
Nationwide commissioned Edelman Intelligence to conduct a 20-minute quantitative online survey among a sample of 1,600 U.S. independent insurance agents, mid-market business owners with fleet vehicles and general consumers between June 9 and June 25, 2020 to understand what business owners and consumers value when buying or renewing insurance policies.
The survey also explored the different challenges each audience faces around insurance and gauged perceptions of the economy and how each audience is managing uncertainty. As well, survey organizes focused on finding out the actions business owners and consumer have taken as a result of COVID-19 and the conversations they’re having with agents. As a member of CASRO in good standing, Edelman Intelligence conducts all research in accordance with Market Research Standards and Guidelines.