Insurance Post’s commercial editor, Izabela Chmielewska, speaks with By Bits co-founder, Callum Rimmer on the key drivers behind the current growth in momentum when it comes to usage-based insurance among policyholders.
Can you explain what By Bits is – and your role in the business?
I co-founded a company called By Miles with James Blackham about five years ago, which provides pay-as-you-drive insurance in the UK. About 18-months ago, we decided to re-platform and expose the technology we run [that does] usage-based insurance. We did this so because it allowed us to make more products, quicker, but [it] also gave us the ability to allow other insurers to create usage-based propositions, whether that was nationally or internationally. And so, we put that under a brand we [now] call By Bits. It gives brands the ability to allow external insurers and ensure techs to interact with the internal By Miles group technology stack.
What do you believe have been the key drivers behind the growth in momentum in UBI acceptance among policyholders?
The pandemic helped educate customers so that they realised that if their vehicle wasn’t being used, the likelihood of making a claim was significantly less than the premium that insurers were collecting. [Their premium] wasn’t reflective of their risk. UBI, and certainly pay-as-you-drive insurance directly reflects the premium we collect on the usage of your vehicle. During the pandemic, many policyholders turned to other types of insurance propositions that would benefit them during pandemic. Lower mileage drivers realise that [UBI and PAYD] is a type of insurance product that works particularly well if drive less than the average number of miles per standard policy year.
This made policyholders more comfortable with the idea of the value of their data. They don’t mind sharing their data if they feel like they can either financially benefit from it or get a better experience.
In our case, we do it though premium usage and other people collect this through driving styles to help lower people’s premiums. It’s this ability to permission data on behalf of the policyholder through an app that then gives them the benefit and is what’s driving the next generation of insurance and why we firmly believe this UBI is going to be the predominant portfolio product that most motor insurance providers will have in the next five to ten years.