How Usage Based Insurance Apps are Shaking Up the Industry

How Usage Based Insurance Apps are Shaking Up the Industry

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Usage Based Insurance (UBI) is a trending field in the insurance industry.  From a consumer point of view, it is clear the majority do not want to pay high policy rates in order to cover drivers that are considered ‘dangerous’.

According to recent research, awareness and demand for Usage Based Insurance (UBI) is on the rise. The main commercial challenge for carriers these days is to reach untapped opportunities to expand UBI into markets beyond the tech savvy and price-sensitive millennials. Successful carriers will be able to position and market UBI to emphasize the benefits that align best with their target audience’s needs and wants.


                      Source: IHS                                                      Source: WIllis Towers Watson

The sharing economy can bring true commercial and social value to the end user, but this requires a shift in many functional areas of apps in this domain. To ensure quality, these changes must be translated into new test cases that haven’t been considered before.  New ideas, such as UBI, will require the industry to adapt their approach to both application development and testing.

While looking for scalable, sustainable and cost effective digital solutions, insurance carriers are abandoning the use of various hardware-based solutions and eyeing the use of mobile apps as part of UBI.  Insurance carriers prefer to use mobile devices for Usage Based Insurance in order to intimately understand their users (socially interact with them and maintain brand awareness) as well as offer them a unique policy model – PHYD (Pay How You Drive).

For the purposes of actuarial calculation (Telematics) of driving behavior/habits, a collection of data from mobile device sensors is required (mainly accelerometer & gyroscope, in addition to GPS).

Right now, 6% of  US households already have a driver enrolled in a UBI program, a significant amount of data is being collected and processed nationwide for each and every drivers’ trips, trying to figure out who’s driving safely.  Big Data strategies and analytics have become fundamental ingredients for InsurTech, but have you considered how to ensure the quality of these cutting-edge services?

What These Trends Mean for Testers and Developers

Let’s take a look at some of the issues involved with implementing this type of program as well as some best practices, drawn from Perfecto’s 4 Pillars of Success, in order to ensure a successful automated test strategy.


While many have said test automation is key to ensuring the health of digital services and user experience, I would suggest it is also necessary to test (automatically) UBI digital scenarios.

Testing automobile-driving scenarios for UBI use cases becomes reality with low-level API control over mobile devices (in order to access the device sensors). An additional approach, which is common today, is based on the ability to mock engine data and inject it, combined with different environment conditions (location, network and background applications, etc), during testing.

Digital Coverage

One of the biggest challenges for insurance quality and development managers is how to bring new digital insurance use cases into the testing lab.  Digital coverage is now a key element to consider when optimizing user experience (UX) as part of an omni-channel engagement model.  Mobile, web and IoT are the channels of choice for users (and all should provide a similar, satisfying experience no matter what the screen resolution, especially if you are already implementing responsive web design methodologies as part of your software development and testing cycles).

Make sure to build your digital index (the right set of devices) based on usage analysis and considering market trends (new OS versions, the adoption patterns of your users, new promising device releases, etc.).

Unique Capabilities

Your test automation should be focused on lowering the risk in the functional and UI areas of your service. This may include testing of new and unique use cases to support different media formats such as audio for voice-assisted customer support or chatbots, visual-based cases for the upload of images as part of damage claims, updating user profiles, and more.

Real-World Conditions Testing

Sustainable test automation should also cover different environmental conditions (and of course not just simulation as part of the driving scenario testing). A user should be able ping the insurance service, asking to submit a claim from a Wi-Fi network or using a specific carrier’s network in different locations. In all cases, the forms and processes should interact under the same criteria, no matter the customer’s location, network, type of screen that is being used, or even which apps are running in the background of the user’s device.

Fast Feedback Loop

Covering so many new test cases means that the quality story is also a Big Data story. As release cadences are becoming shorter in the new agile world of development and testing, having a fast feedback loop is also a key to success.  Quality Reporting & Analytics efforts should generate insights and help teams identify any outstanding issues early enough in the process to avoid implications on services in production.

DevOps processes require managers, both in dev & QA, to make educated release decisions quickly. With a growing number of test cases across various digital platforms and high pace of release cycles, the natural solution is a quality dashboard that allows different stakeholders to feel the pulse of development and be aware of the quality status across the release pipeline, identify bottlenecks, reduce errors and communicate quality findings in order to lead to efficient fixes of failures.

New Challenges Require Innovative Test Strategies

There’s no escaping the facts:  mobile is becoming the dominant way of interacting with companies and online services.  In the case of the insurance industry, a world with “a mobile phone in every pocket” brings with it a new and powerful means of providing innovative services such as Usage Based Insurance.  The ubiquitous mobile, with the wealth of data that it can provide, can make this type of product possible, which is otherwise difficult and costly to implement.  

However, it should be self-evident that app quality is a mission-critical element in the deployment of a product such as UBI.  Developers and testers need to be especially mindful of best practices in these situations.  Hopefully, the aforementioned guidelines will help put you on the right track to developing a solid testing strategy as the industry is very close to the tipping point.  

The pace of technology is reshaping the Insurance industry into UBI. Consumers have come to expect the best and latest experiences in this dynamic ecosystem. Learn more about how insurance companies are tackling these new challenges, as well as how you can improve the quality of your own app;  check out Perfecto’s Continuous Quality Lab .



Tzvika Shahaf is a Director of Product Management at Perfecto, focusing on the quality intelligence and reporting and analytics capabilities. He previously worked in business development and product leader roles at venture capital and startup firms.

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