Consumer Acceptance of Telematics Widens, Says Survey

Consumer acceptance of telematics technology in auto insurance is growing, creating opportunity for insurers who can cater to tech-driven drivers who crave personalized pricing and service.

Today, 82% of policyholders view telematics apps positively, according to a recent survey by the global insurance think tank IoT Insurance Observatory in partnership with the mobility data and analytics company Arity. Sixty percent of respondents said they are open to switching to usage-based insurance, and 52% would share driving scores to receive personalized pricing.

Research indicates that telematics apps could make auto insurers more competitive if they can cater to forward-thinking drivers who are ready to save. App adoption is already high among younger users and those with positive sentiment: 66% of respondents already have their insurer’s app installed.

Telematics programs resonate with drivers because drivers want premiums that make sense for their lifestyles and reflect the way they actually drive—not just how people like them drive. Customers are also increasingly willing to have their driving assessed with a driving score or to leverage a preexisting driving score to obtain a personalized price. When consumers see the value that those scores can deliver, such as discounts or rewards, insureds feel more compelled to share their driving behavior data.

Survey respondents’ most requested services are:

• Rewards for safe driving (45%)
• Emergency assistance, such as crash detection (43%)
• Anti-theft features (37%)

Those surveyed preferred the following pricing models:

• Traditional: 24%
• Tailored renewal (no surcharge): 23%
• Monthly change: 16%
• Fuel cashback: 13%

And older generations are increasingly open to adopting telematics. While survey respondents over 50 years old show more resistance to telematics than their younger cohorts, resistance among older drivers has dropped from 36% to 29% since 2022.

Older generations prefer familiar pricing models (e.g., tailored renewal with no surcharge), with 29% of Baby Boomers and 40% of Traditionalists choosing traditional plans. Younger users lean toward dynamic models like monthly change or fuel cashback, with 20% of Gen Z and 18% of Millennials favoring fuel cashback.

• 1% of respondents (among those with a positive opinion of the telematics app and open to switch policies) said “Yes” to using a preexisting driving score (from a connected car or app) to get a personalized insurance price.
• Only 16% of those surveyed preferred a flat 22.5% discount for the first coverage period instead.
• 4% of survey takers were indifferent, suggesting they may be swayed with the right messaging or incentives.
• 76% of survey respondents are willing to pay at least $5 per month for enhanced services.
• Dashcam-based assistance services (like those sold by personal auto carriers in Japan) are attractive
• 43% of those surveyed would pay $9.99 per month, and this number increases to 56% if the service is discounted to $4.99 per month

Although telematics presents new possibilities through discounts and rewards, its value isn’t confined to pricing. Research indicates it opens doors to value-added services such as roadside assistance.

What does this mean for the future of insurance? These consumer shifts suggest a market that is ready for personalization, added value and innovation. Insurers that act now will not only meet consumer expectations in the short term but also position themselves as leaders in the long term.