There are usually two explanations for the definition of UBI: one is Usage Based Insurance, which is an insurance that pays for mileage used by vehicles; The other is User Behavior Insurance, which is an insurance designed by driver behavior. Although the two explanations are completely different, they are not much different in nature, they are based on Telematics to upload vehicle-related information to remote servers, and then insurance companies re-design their products based on a large amount of data.

Since 2011, the overall auto insurance market profit margin has declined, one of the main reasons is that the price of auto parts and maintenance labor costs have increased significantly, which directly leads to the increase of commercial auto insurance claims costs, and the profit margin has decreased. In such a market environment, the ability of insurance companies to control claims cost is particularly important. One of the important value propositions that UBI products bring to insurance companies is to reduce claims costs. UBI mainly saves the claim costs for insurance companies in three ways:

UBI pricing is based on monitoring actual driving behavior, in other words, the better the driving behavior, the lower the premium. Therefore, customers who think they are driving well and at low risk are more likely to choose UBI products than those who are driving poorly. Therefore, in the short term, the emergence of the UBI program will motivate high-quality customers to make their own choices and attract more and more low-risk drivers for insurance companies. With the increasing number of high-quality customers, car accidents will be significantly reduced, and insurance company claims will be reduced accordingly.

Improving driving behavior to attract high-quality customers is the short-term benefit that UBI products bring to insurance companies. For insurance companies, improving the behavior of high-risk customers often helps to improve the long-term benefits of the company. In the long run, through real-time monitoring of customer driving behavior and providing premium discounts for safe driving behavior, UBI can effectively form a binding force for customer behavior, thereby gradually improving customer driving behavior, reducing the frequency of accidents and claims per case, and fundamentally reducing claims costs.

It takes a long time to shorten the claim period and reduce the claim leakage of the traditional automobile insurance reporting mode, which not only impairs the customer experience, but also reduces the accuracy of accident damage. Therefore, how to shorten the claim period is an important management requirement of insurance companies. The practice shows that the automobile networking has considerable application value for shortening the claim period. Generally speaking, insurance companies will set up special claims teams to deal with the new information on vehicle networking. When an accident occurs, the mobile device in the vehicle reports to the insurance company through the Internet for the first time, and transmits vehicle data information to help the insurance company judge possible losses, provide timely assistance to customers, and minimize losses. In addition, traditional accident damage often lacks objective understanding of vehicle driving information and accident site restoration before the accident. Vehicle networking equipment can objectively restore the details of the accident by perfectly recording the driving information before and after the accident, which can provide more scientific loss fixing information for insurance companies, and also effectively prevent insurance fraud.

UBI managed data service platform, uses its own records to build a large data platform, and cooperates with many traffic policemen to create a true vehicle networking platform in the UBI era.