Preferences for pay-as-you-drive insurance offers among residential customers in Germany - a conjoint-analytical investigation

Advanced pay-as-you-drive (PAYD) insurances entail the collection, the analysis, and frequently the mobile radio-network based transmission of trip and car data to take vehicle-specific accident risks into account when deriving liability insurance rates. An online-survey of 517 German-speaking car drivers was conducted to estimate via limit conjoint analysis utilities which individuals ascribe to four selected PAYD design features. At the aggregate sample level, participants favoured most (least) PAYD offerings with 50% (10%) potential savings, automatic emergency call in case of an accident (without supplementary services), car data transfer at the end of an accounting period (real-time data transmission while driving) and with two (three) driving characteristics used to calculate individual rates. The results suggest that insurers should initially tailor PAYD offers to a segment of insurants who are mainly interested in an automatic car emergency call system, but who are inclined also to subscribe to a PAYD offer as an ‘add-on’ even if it entails limited saving prospects.