In our analysis, consumers generally cited context when disagreeing with specific determinations of negative actions (e.g.,
rapid accelerations, hard brakes) or when explaining the reasons
for the driving behaviors. For example, @micaela_onus tweeted:
The progressive snapshot thing in my car doesn’t
realize I can’t slowly come to a stop every time a deer
Progressive and other companies with usage-based insurance programs advertise that rates will not go up as a result of
being insured. But even if the customer receives a Snapshot discount, other factors related to overall rate changes or exposure
changes could cause premiums to increase. If this happens while
customers are being monitored under the Snapshot program,
they are more likely to associate the rate increase with the fact
that their driving is being monitored. An example of this is a
disgusted tweet by @jesseauciello:
After 6 months with @Progressive, they’re raising our
premium by 47%. No accidents, no claims, no tickets.
Oh, and Snapshot? No discount.
Once customers have been rated under the Snapshot program
and are receiving their discounts, the majority of the sentiments
expressed in the tweets become more positive ( 58 percent positive, versus 35 percent negative). The distribution of positive
customer responses is shown in Figure 2.
Savings on premiums plays a big role in this higher level of
satisfaction. Of the customers who tweeted positively about the
Snapshot program, 76 percent did so because they saved money.
Customers tweeted about the money they saved, the percentage of the Snapshot discount they received, or their premium
To encourage customers to sign up for a program like
Snapshot, potential savings will need to be significant. A few
companies offer a discount simply for signing up. But there are
some customers for whom the advertised savings aren’t significant enough to spur them to sign up for or continue in a
usage-based insurance program. Companies either may need
to offer additional incentives for these customers or accept that
they will bail from the program.
It should be noted that while the potential for significant
discounts is a big incentive to try usage-based insurance, there
were some customers in our study who also were excited to see
their driving behavior improve. This syncs nicely with one of the
key goals of any usage-based insurance program—customers improving their driving behavior and making the roads safer. Still,
the primary reason for positive reactions from customers was
that they saved money. The distribution in the tone of tweets
reacting to the savings potential is shown in Figure 3.
The tone of the tweets becomes increasingly positive as the
percentage of the discount increases. For those receiving less
than a 10 percent discount, half of the tweets are positive, while
the other half are either neutral or negative. Also, even for discounts as high as 20 percent to 29 percent, there are still a small
Consumer Reactions to Telematics CONTINUED
FIGURE 2 Customer Positive Responses
Source: Pinnacle Actuarial Resources
0% 10% 20% 30% 40% 50% 60% 70% 80%
Share of Tweets