5 Benefits of Mobile-based UBI

6 min read
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UBI should really stand for User-Based Insurance, not Usage-Based Insurance. This small change in definition would immediately expand the very narrow view of what UBI typically means for auto insurers. Many insurers still only consider how the vehicle is being handled. They ignore important factors such as the context of the trip and the behavior of the driver. This improved model for UBI puts the driver at the center, not the vehicle. This is the approach that Sentiance has taken from the start. We believe it is essential to focus on the user to better understand their lifestage and their behaviors and routines and the potential risks associated with them. This includes things like phone distraction, origin and destination, and the context of the trip.


What else is the user doing in the car when they drive? Are they using their mobile phone? Mobile phone usage has become the number one cause of car accidents in the United States. The Sentiance mobile-based UBI solution tracks various phone-related distractions, including texting, swiping, calling, and mounted vs. handheld distractions. Few mobile-based UBI solutions can track these behaviors accurately, if at all.

Origins and Destinations


Where are drivers coming from and where are they going? Someone who drives home from a bar probably has a higher risk profile than someone who drives home straight from work. Similarly, a workaholic driving home after 14 hours at the office is likely more of a risk than someone who spent a typical 8 hours at the office. Knowing the before and after trip activities provides highly relevant contextual insights.



Understanding the entire context of a user is not only important for making more accurate predictions about risk profiles, it also presents opportunities for insurers to coach their insured to become better drivers. If you want to coach drivers, you don’t just need to know how they drive; you need to understand why they drive the way they do. As mentioned in a previous post, Sentiance has developed a Behavior Change platform, enabling insurers to coach their insured to drive safer.

So how can insurers make the transition from vehicle-based UBI to a user-centric UBI? There are 5 things insurers need to take into account when designing their next-generation UBI solutions.

1. Accuracy


Hardware-based solutions will never get us to “user-based” UBI. They will always be confined to the vehicle. The only path to real UBI is a mobile-based solution that can track the broader context of the user. The main argument against mobile-based solutions has traditionally been accuracy. It is true that a few years ago, hardware-based solutions were more accurate. But significant progress has been made recently. Artificial intelligence and deep learning algorithms have become incredibly powerful in filling in the missing data holes that mobile-based solutions used to struggle with. For example, a large global ride-sharing company tested Sentiance’s mobile-based solution by comparing it side by side to an IMU box (a very sophisticated device used to calibrate Formula 1 cars). The test showed a 97% accuracy of the Sentiance mobile-based solution. Not every mobile-based solution will be as accurate. In fact, there are still significant differences in accuracy between different vendors. But an insurer can easily set up a similar side-by-side test to ensure the solutions meet their required accuracy thresholds.


2. Privacy


In order to protect the privacy of their customers, insurers should be explicit about what they track and should never track anything beyond low level, anonymous signals produced by the sensors in the mobile device (typically location, time, speed, acceleration and gyroscope data). The best solutions will only use this minimal set of parameters to infer the broader context about the user. This requires advanced data science capabilities that only a few solutions provide. Doing more with less data is the approach that Sentiance has taken since our founding.


3. Transparency


UBI solution providers will never know exactly how an insurer’s actuarial algorithms work. So they need to be open to work with the actuaries on the insurer’s side to tailor the outputs from the algorithms to the insurer’s needs. Some solution providers only hand over one driver score. Others open up the entire dataset so the actuaries can test which variables are most predictive for their purposes. Again, this is the approach that Sentiance has taken. In addition, Sentiance offers a flexible driver score based on a client’s specific use case.


4. User-based

ubi-driver centric

With user-based insurance, we can distinguish multiple drivers sharing the same car and also individual drivers using multiple cars.

With a user-based approach, insurers can detect trips beyond the single vehicle, which enables you to see a share of their total mobility profile: is their car (& your policy) the only way they travel, or do they also cycle, travel by train, or carpool in another vehicle? 

By observing all trips taken, you can create personalized engagement opportunities to understand trip context, such as commutes and school runs. You can even understand the post-trip context, such as seeing if the driver visited a hospital after a crash is detected.

Lastly, by collecting customer insights beyond the car, you can start to see the benefits of other parts of your UBI program, such as reducing phone usage while driving with personalized in-app coaching programs. This gives you the possibility to incentivize your policyholders to be safer drivers or use their vehicles less by rewarding them to take more sustainable transportation options.


5. Cost

CostOne of the main advantages of mobile-based solutions has always been the ease and speed with which they can be deployed. Many UBI solutions still require a dongle or a small Bluetooth device that tells the app the driver is in the car. This requirement drives up the vendor’s costs as tags naturally get lost or fail, and they need to be replaced. This cost is, of course, pushed to the insurer, which drives up the program’s overall cost. Sentiance does not require a tag or a device to be installed. Our mobile-based solution relies on algorithms that accurately detect the driving behavior of each person who has simply downloaded a mobile app. This increases consumer adoption even further. The installation of tags or hardware devices in cars is often a mental barrier for consumers. Car insurers must consider this as they do their due diligence when selecting a vendor.


Today, UBI is getting to a point of critical mass. The adoption of UBI products is rising fast, especially among new customers during COVID times. According to Research and Markets, the usage-based insurance market for automotive is projected to reach USD 126 billion by 2027 from USD 24 billion in 2019, at a CAGR of 23.0%. As this market reaches maturity, insurers need to make sure they move to the next generation of solutions that put the user at the center. With mobile-based UBI, you can reap the cost and contextual benefits of the solution as well as scale your program rapidly.

For more information, you can download our demo app, Insights, or contact us!

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Sentiance is the leader in motion insights. Our mission is to save lives every day and shape the future of road safety. Unlike telematics companies, we focus on the driver and not the vehicle because most accidents are caused by human error.  

With our revolutionary on-device AI technology, companies use insights from The Edge Platform to produce scalable, cost-efficient, and privacy-centric solutions for their customers.


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