Insurtech Metromile is offering free quotes for usage-based policy
- Metromile's new app feature lets drivers see the potential cost savings of its pay-by-mile policy before switching.
- And adding behavioral data would further amplify the coverage's benefits.
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Ride Along allows drivers to get a free insurance quote based on their driving without signing up to Metromile, per a press release seen by Insider Intelligence. Potential users can download the app, which will then monitor how many miles they drive for 17 days.
Based on that data, Metromile calculates their monthly bill and how much users could save if they were to become a customer. Launched in 2011, the full-stack insurtech charges users based on miles driven using an IoT device that connects to the car's OBD-II port, and has so far secured $293 million in funding.
The Ride Along feature aims to accelerate Metromile's customer acquisition. Just 13% of global auto insurers said they've achieved substantial market penetration with their connected devices, suggesting that most consumers have yet to adopt the usage-based insurance (UBI) model. And that's not for lack of availability: Progressive and Allstate—the third- and fourth-biggest US auto insurers respectively—offer UBI programs, but these are only available when first purchasing an auto insurance policy.
By contrast, the Ride Along feature is a free "no strings attached" way for drivers to understand the tangible benefits of Metromile's pay-per-mile policy. As many US consumers are driving less due to the pandemic, many are overpaying for auto insurance that does not take actual mileage into consideration. And as price is the biggest driver for US consumers who decide to switch their insurance provider, the new feature is well-timed to attract users. This is especially important as Metromile has so far prioritized tech and product development over marketing, leading to slow growth over the past few years.
Metromile should now bolster its analytical capabilities beyond mileage to further cement the benefits of its coverage. Metromile has started to integrate behavioral data—such as speeding, braking habits, and time of day driving—into its coverage pricing in four of its eight US markets, which provides more information on drivers to potentially further push down prices.
Customers can save an additional 40% on their initial Metromile quote for demonstrating safe driving habits in select markets, per the release. By taking both behavioral and mileage data into account, the Ride Along feature can present prospective new users with an even cheaper initial quote, further boosting uptake. It would also help the insurtech better compete with incumbents: While Allstate's UBI program cannot be trialed for free, it does leverage behavioral data in addition to mileage, enabling it to offer more personalized policies.
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