Quick show of hands: Would you sign up for Progressive’s Snapshot program?

Unless you’re a millennial, maybe not—but you might be failing to take into account about one-third of your clients who would.

A recent Towers Watson survey reports that millennials are the most enthusiastic generational cohort when it comes to buying usage-based insurance: 72% of young drivers prefer it to traditional premium calculation factors, compared to only 51% among other age groups.

According to the National Association of Insurance Commissioners (NAIC), the older you are, the less likely you are to be comfortable with the idea of insurers tracking your driving behavior: Baby boomers are the most protective of their privacy, followed by Gen Xers.

Older generations “aren’t early adopters [of telematics] like millennials, so they haven’t been as accustomed,” says Laura Sherman, founding partner of Baldwin Krystyn Sherman Partners and an instructor with the National Alliance for the Certified Personal Risk Manager designation. “I think you’ll find they’ll be a lot more hesitant to share all that information.”

But younger drivers like millennials “grew up with their world being very public,” says Sherman, who serves on several insurer councils, including the Advisory Board of the Council for Insuring Private Clients, AIG Private Client Group National Broker Council. “They will probably be a lot more adoptive.”

That might help explain why of the clients who shop directly with Progressive, “more than a third sign up for Snapshot,” says Dave Pratt, general manager of usage-based insurance at Progressive. “And it’s not that our salesperson is persuading people to sign up. Customers are simply using the website where we describe the program and ask if you want to do it or not.”

By contrast, “with our independent agents, we’ve got much fewer people signing up for Snapshot,” Pratt says. “The challenge is convincing our agents that even if the agent doesn’t want to do Snapshot, they still should not deprive their clients of the chance to not only save money but also make their family safer.”

So what are the potential benefits of a usage-based auto insurance program like Snapshot? “Setting prices based on how you personally drive instead of how old you are and whether you’re married is fairer,” Pratt says. But more important, “it gives people incentives and information that should help them be safer. We have strong evidence that the feedback we give people through Snapshot actually does help people drive more safely.”

Consider that several years ago, Progressive added audio feedback to the Snapshot device. “After a hard brake, it beeps,” Pratt explains. “One of the driving behaviors we look at is hard brakes per mile driven, and we see a pretty significant decline in the first couple weeks of having the device. After you hear those beeps, you start to identify the situations that are going to require a hard brake, and you try harder to avoid them. That translates into fewer accidents, too.”

So while usage-based insurance tends to be associated with accurate risk pricing, “we’ve also been able to reduce the risk and help people be safer,” Pratt says.

This emphasis on driver safety has some concerned that usage-based insurance could have additional consequences beyond the big brother factor. “The thing that’s going to be somewhat difficult is that you’re only going to get the people who do drive safely that are willing to participate,” Sherman says. “So there will be some adverse selection then for the people who choose not to participate.”

And pay close attention to the regulations in your state. According to the NAIC, a handful of states have banned usage-based insurance altogether, while many allow tracking mileage but not driving habits such as hard braking and cornering.

But like it or not, usage-based insurance is probably headed your way soon. Although the cost of capturing and storing high volumes of data originally made usage-based insurance a capability only available in the wheelhouse of larger insurers, the NAIC reports that small and midsized companies are now venturing into the space as well, thanks to third-party vendors like Towers Watson assisting with data processing.

According to Pratt, some 30 insurers are currently working on usage-based insurance programs. “The Allstate guy down the street is taking advantage of this tool,” he points out. “You’re at a competitive disadvantage if you’re not doing it. The independent agent has the relationship with the customer, so they’ve got this great opportunity to explain the advantages of this innovation. If the customer doesn’t want to do it, that’s fine—at least they have the chance to learn about it and decide for themselves.”

How is the pool of personal auto risks evolving in response to trends like usage-based insurance? Keep an eye on IAmagazine.com and upcoming issues of the Markets Pulse e-newsletter to find out.

Jacquelyn Connelly is IA senior editor.