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GEICO, USAA embrace telematics in private auto underwriting

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GEICO, USAA embrace telematics in private auto underwriting

After lagging rivals for years, two of the largest private auto insurers in the U.S. are moving full-steam-ahead on telematics programs.

Many big auto insurers, including State Farm Mutual Automobile Insurance Co., Progressive Corp. and Allstate Corp., have offered usage-based insurance programs for years. Joining them now are Berkshire Hathaway Inc.'s GEICO companies, with the DriveEasy telematics program, and United Services Automobile Association, which offers its own program in four states following the conclusion of a pilot in 2018.

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GEICO's DriveEasy program, now in certain states for select clients, uses a smartphone app to track driving habits and assign scores. Distracted driving, measured by mobile phone use, has the largest impact on a driver's score. Other factors include hard braking, measured by decelerating at least seven miles per hour per second; distance driven; and the time of day a vehicle is driven.

Some drivers in Pennsylvania insured by GEICO were able to enroll in the DriveEasy program as early as Sept. 12 for new business, according to a product filing. It will be available Oct. 28 for renewals.

After concluding its pilot program, Discount for Driving Research, in March 2018, USAA launched its SafePilot program, which is currently available in four states: Virginia, Texas, Arizona and Ohio.

Each driver on a given policy will receive an initial 5% discount for simply enrolling in the behavior-based insurance program. The mobile app and scoring model will use TrueMotion Inc. technology to create scores, which could lead to USAA offering discounts of up to 20% on future renewals.

Hard braking and distracted driving will determine a driver's score for USAA's program, according to a review of its rate filing in Virginia. The score will range from zero to 100, with the highest score representing the lowest-risk driver. Distracted driving, which factors in talking on the phone and general mobile device interaction, accounts for 80% of the score.

The remaining 20% is based on the number of times the driver brakes hard per 1,000 miles traveled. Hard braking will be measured in terms of g-forces, or the amount of gravitational pull on the vehicle during deceleration. Creating a g-force of at least 0.3 at the time of braking is counted as a hard brake event.

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