How do Consumers Think About Usage-Based Auto Insurance? –A Survey Analysis from Taiwan

Peng Jin-Lung (), Chen Yi-Fan () and Chen Yen-Chih ()
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Peng Jin-Lung: Department of Risk Management and Insurance, National Chengchi University, Taipei, Taiwan
Chen Yi-Fan: Department of Risk Management and Insurance, National Chengchi University, Taipei, Taiwan
Chen Yen-Chih: The Bachelor’s Degree Program in Financial Engineering and Actuarial Science, 198403 Feng Chia University College of Finance , Taichung, Taiwan

Asia-Pacific Journal of Risk and Insurance, 2025, vol. 19, issue 2, 145-171

Abstract: Despite the inherent benefits of usage-based auto insurance (UBI), such as loss prevention and reduced premiums, the UBI market has encountered limitations hindering its expansion in practical terms. This study aims to explore the attitudes of consumers towards UBI and the pivotal factors influencing their decision to adopt UBI. According to the survey, a better understanding of the rationale behind pay-as-you-drive auto insurance (PAYD) and pay-how-you-drive auto insurance (PHYD) plays an important role in policyholders’ acceptance. In addition, consumers with higher auto insurance premiums and individuals willing to share their data are more likely to buy UBI. Our research suggests that the promotion of UBI should be aligned with increasing individuals’ willingness to share personal information and reducing privacy concerns. This could not only increase the willingness to purchase UBI but also help balance discount expectations between policyholder and insurer.

Keywords: usage-based auto insurance; UBI; privacy concerns; insurtech; auto insurance (search for similar items in EconPapers)
JEL-codes: G22 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1515/apjri-2024-0015

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