Insurance Telematics in Europe and North America – 2nd Edition

Insurance Telematics in Europe and North America is the second strategy report from Berg Insight analysing the latest developments on the insurance telematics market.

This strategic research report from Berg Insight provides you with 190 pages of unique business intelligence including 5-year industry forecasts and expert commentary on which to base your business decisions.

Highlights from this report:

Insights from 30 new executive interviews with market leading companies.
Comprehensive overview of the insurance telematics value chain and key applications.
In-depth analysis of market trends and key developments.
Case studies of more than 40 insurance telematics initiatives.
Summary of the involvement of vehicle OEMs and mobile operators.
New data on vehicle populations in Europe and North America.
Market forecasts by country lasting until 2020.

This report answers the following questions:

What types of insurance telematics products are offered on the market?
Which are the leading providers of insurance telematics technology?
What business models are available for insurers entering the insurance telematics space?
Which are the most successful insurance telematics programs today?
How are mobile operators approaching the insurance telematics market?
How are the vehicle OEMs involved in the ecosystem?
Which are the major drivers and barriers for insurance telematics adoption?
Which are the key future trends in the industry?

Executive summary

The integration of telematics technology constitutes the latest revolution for the automotive insurance industry. The concept of telematics is a portmanteau of telecommunications – longdistance communication – and informatics – the science of information. Telematics in general thus refers to the collection of information related to remote objects such as vehicles via telecommunication networks. The introduction of telematics technology in the context of automotive insurance is commonly referred to as usage-based insurance (UBI) or insurance telematics. Solutions of this type generally enable automotive insurers to improve pricing mechanisms based on actual driving data, gain better control of claims and differentiate their offerings to current and prospective policyholders. Variants of insurance telematics which have been popularised over the years include behaviour-based pricing models such as Pay- As-You-Drive (PAYD), Pay-How-You-Drive (PHYD) and Manage-How-You-Drive (MHYD).

The addressable market for insurance telematics is significant. A total of around 282 million vehicles were in use in EU23+2 in 2014, including over 246 million passenger cars. In North America, an estimated total of around 276 million vehicles were in use in 2014, out of which passenger cars and light trucks are estimated to represent almost 263 million vehicles. Some kind of basic automotive insurance is mandatory in most developed countries and there are moreover a number of subcategories of insurance that provide coverage for different types of unforeseen events involving motor vehicles. Motor gross written premiums in EU23+2 reached a total of over € 125 billion in 2014. The equivalent number for North America was US$ 215 billion (€ 162 billion) in 2014.

The nascent insurance telematics market is currently in a phase of strong growth which is expected to accelerate in the coming years. Europe and North America so far represent the vast majority of all insurance telematics programmes and active policies from an international perspective, and the front-running national markets include the US, Italy and the UK. Berg Insight estimates that the total number of insurance telematics policies in force on the growth rate of 37.2 percent, the number of insurance telematics policies in force in Europe is estimated to reach 25.8 million by 2020. In North America, the total number of insurance telematics policies in force is forecasted to increase from an estimated 6.3 million policies at the end of 2015 to reach 42.1 million policies by 2020, representing a compound annual growth rate of 45.8 percent.

The market penetration of UBI in Canada has previously been considerably lower than in the US. However, the number of telematics-based auto insurance policies in Canada has seen tremendous growth during the past year and is now estimated at 450,000. In the US, the top three insurers in terms of UBI policies have all introduced or announced plans to launch smartphone-based solutions to supplement or replace the previously used OBD dongles. The European insurance telematics market is still dominated by insurers in Italy and the UK, with an estimated 4.3 million and 540,000 policies respectively. Uptake on all other markets are considerably lower, with between 50,000 and 100,000 policies in Spain, Austria and France, and between 10,000–20,000 policies in Benelux, Switzerland, Scandinavia and Germany.

The insurance telematics value chain spans multiple industries. Insurers with notable presence in the insurance telematics market include Progressive, UnipolSai, State Farm, Allstate, Generali, Allianz, Intact and Insure The Box. Insurance players can either develop telematics programmes independently or rely on partners to varying degrees. Renowned telematics suppliers active in the insurance field for example include Octo Telematics, Vodafone Automotive and LexisNexis Risk Solutions. Intelligent Mechatronic Systems, Cambridge Mobile Telematics, The Floow, Modus, Baseline Telematics and DriveFactor are also notable players on the market. Automotive OEMs are increasingly taking an active part in the ecosystem. Examples include General Motors, Ford, Renault-Nissan, BMW, Daimler and Fiat. In addition, mobile operators such as Vodafone, Telefónica, Verizon and Sprint are offering insurance telematics solutions, commonly working with telematics partners. The insurance telematics market has seen significant M&A activity in recent years, involving diverse players from many parts of the ecosystem. Notable deals in 2014 include Vodafone’s acquisition of Cobra, Renova Group’s purchase of Octo Telematics, ANDIE (MS&AD) which acquired Insure the Box and LexisNexis’ acquisition of Wunelli. In 2015, Generali Group acquired the UK start-up MyDrive Solutions and in early 2016 the Canadian insurance company Intact made an investment in San Francisco-based Metromile.

Executive summary
1 The automotive market
1.1 The automotive market in Europe
1.1.1 Vehicles in use and car density
1.1.2 New car registrations and leading manufacturers
1.2 The automotive market in North America
1.2.1 Vehicles in use and car parc density
1.2.2 New car registrations and leading manufacturers
1.3 Automotive insurance
1.3.1 Basic insurance terminology and categorisations
1.3.2 The fundamentals of automotive insurance
1.3.3 Traditional automotive insurance risk rating and pricing criteria
1.3.4 Developments of the actuarial toolbox for motor insurers
1.4 The European automotive insurance market
1.5 The North American automotive insurance market
2 Insurance telematics solutions
2.1 Introduction to insurance telematics
2.1.1 The rationale for telematics-based insurance policy pricing
2.1.2 Brief history of insurance telematics offerings
2.2 Usage-based insurance and related concepts and applications
2.2.1 Manual reporting
2.2.2 Usage-based insurance telematics – PAYD, PHYD, MHYD, TBYB
2.2.3 Continuous and time-limited telematics data recording
2.2.4 Usage-based pricing vs. claims-related insurance telematics
2.2.5 Personal lines and commercial lines insurance telematics
2.2.6 Value-added services related to insurance telematics
2.3 Insurance telematics infrastructure
2.3.1 Vehicle segment
2.3.2 Insurer segment
2.3.3 End-user segment
2.3.4 Network segment
2.3.5 GNSS segment
2.4 Business models
2.4.1 In-house development
2.4.2 Leveraging telematics partners
2.4.3 Underwriting without direct client interaction
3 The European insurance telematics market
3.1 Regional market characteristics
3.1.1 Italy
3.1.2 United Kingdom
3.1.3 Spain
3.1.4 Austria
3.1.5 France
3.1.6 Benelux
3.1.7 Switzerland
3.1.8 Scandinavia
3.1.9 Germany
3.1.10 Eastern Europe
3.2 Insurance telematics case studies
3.2.1 Italian insurer UnipolSai has an installed base of 2.6 million blackboxes
3.2.2 Generali acquires MyDrive and has reached 920,000 telematics policies
3.2.3 Allianz’s dedicated Telematics subsidiary serves several European operations 69
3.2.4 Insure The Box has sold 625,000 blackbox-based policies in the UK
3.2.5 Direct Line grows rapidly in the UK and has 78,000 active UBI policies
3.2.6 Aviva Drive app has reached 550,000 downloads in the UK
3.2.7 UK-based Ingenie adds Highway Insurance to its panel of underwriters
3.2.8 Towergate’s iKube policies are powered by TomTom Telematics
3.2.9 Fiat and Volkswagen works with Carrot Insurance and Trak Global
3.2.10 Marmalade has over 50,000 customers in the UK
3.2.11 RSA has launched UBI programmes in the UK, Canada and Norway
3.2.12 Coverbox starts using windscreen trackers and mobile app
3.2.13 Autoline launches Chillidrive powered by Lightflows
3.2.14 Citroën pilot used standard-fitted telematics solution powered by Teletrac
3.2.15 BMW’s ConnectedDrive enables UBI powered by Allianz in the UK
3.2.16 Renault-Nissan Alliance partners with The Floow
3.2.17 Daimler Financial Services runs PHYD pilot programme
3.2.18 German insurer Signal Iduna launches UBI based on TomTom OBD device
3.2.19 Telefónica moves to smartphone-only solutions
3.2.20 UNIQA SafeLine powered by Dolphin Technologies has a focus on safety
3.2.21 Groupama in France has launched PHYD insurance
3.2.22 Chipin has 5,000 insurance telematics end users on the Dutch market
3.2.23 Spanish MAPFRE Group has also launched insurance telematics in the US
3.2.24 ÖSA and Sparkassen Versicherung offers eCall services in Germany
3.2.25 GDV launch eCall service with 46 participating German insurers
3.2.26 Zavarovalnica Triglav works with Amodo to bring UBI to Eastern Europe
3.2.27 Scope Technologies and Eucon team up to launch pilot with HDI Global SE
3.2.28 AXA focuses on recording crashes in Switzerland
3.2.29 Telia Company introduce cloud-based connected car platform
3.2.30 Paydrive offers UBI in Sweden
4 The North American insurance telematics market
4.1 Regional market characteristics
4.1.1 United States
4.1.2 Canada
4.2 Insurance telematics case studies
4.2.1 Progressive has reached 4.0 million cumulative participants in the US
4.2.2 State Farm transitions to smartphone solution using a Bluetooth beacon
4.2.3 Allstate has reached 1.0 million active UBI policyholders
4.2.4 Esurance announced the DriveSense mobile app in June 2016
4.2.5 Desjardins offers smartphone app for insurance telematics in Canada
4.2.6 Toyota and Aioi Nissay Dowa form telematics insurance services company
4.2.7 iA Financial Group’s Canadian UBI offer Mobiliz is powered by Baseline
4.2.8 Telogis has partnered with Travelers and Liberty Mutual for fleet insurance
4.2.9 Sprint’s ecosystem of UBI expert partners includes IMS and Modus
4.2.10 True Mileage uses NFC technology, works with Ohio Mutual Insurance Group115
4.2.11 VOXX’s Car Connection dongle now also supports insurance telematics
4.2.12 Spireon adds insurance telematics to its NSpire platform
4.2.13 OnStar joins Verisk Telematics Data Exchange
4.2.14 Samsung enters the telematics market by launching Samsung Connect Auto118
4.2.15 Intact has sold 230,000 UBI policies in Canada and invests in Metromile
5 Market forecasts and trends
5.1 Market analysis
5.1.1 Insurance telematics policies and penetration in Europe and North America
5.1.2 Form factor developments in Europe and North America
5.2 Value chain analysis
5.2.1 Insurance industry players
5.2.2 Telematics industry players
5.2.3 Automotive industry players
5.2.4 Telecom industry players
5.2.5 IT industry players
5.2.6 Mergers and acquisitions in the insurance telematics space
5.3 Market drivers and barriers
5.3.1 Macroeconomic environment
5.3.2 Regulatory environment
5.3.3 Competitive environment
5.3.4 Technology environment
5.4 Future industry trends
5.4.1 Continued broadening of the insurance telematics concept is expected
5.4.2 Insurers will embrace both UBI and claims-related insurance telematics
5.4.3 Form factor shift to favour mobile devices in the short term
5.4.4 Connected cars pave the way for mass-marketisation of insurance telematics 155
5.4.5 New data exchanges expected to make OEM data available to small insurers 155
5.4.6 Commercial applications to grow alongside personal lines insurance telematics156
5.4.7 Privacy concerns are softening across customer segments
5.4.8 Big Data: Ownership and portability of telematics data to be scrutinised
5.4.9 Autonomous cars alter the playing field for motor insurance
6 Company profiles and strategies
6.1 Agero
6.2 Agnik
6.3 Baseline Telematics
6.4 CalAmp
6.5 Cambridge Mobile Telematics
6.6 CCC Information Services and DriveFactor
6.7 Dolphin Technologies
6.8 Geotab
6.9 Hubio
6.10 IMETRIK Global
6.11 Intelligent Mechatronic Systems
6.12 LexisNexis and Wunelli
6.13 Meta System
6.14 Modus
6.15 MyDrive Solutions
6.16 Octo Telematics
6.17 Quartix
6.18 Scope Technologies
6.19 Teletrac Navman
6.20 Telogis
6.21 The Floow
6.22 TomTom Telematics
6.23 Trakm8
6.24 TrueMotion (Censio)
6.25 Verisk Analytics
6.26 Vodafone Automotive
6.27 Willis Towers Watson
6.28 Zurich Fleet Intelligence
List of Figures
Figure 1.1: Vehicles in use (EU23+2 2014)
Figure 1.2: Passenger car density per 1,000 inhabitants (EU28 2013)
Figure 1.3: Passenger car registrations by manufacturer (EU28 2015)
Figure 1.4: Vehicles in use (North America 2014)
Figure 1.5: Passenger car registrations by manufacturer (North America 2015)
Figure 1.6: Motor insurance statistics (EU23+2 2014)
Figure 2.1: Distribution of fatal crashes by day of week and time of day (US 2014)
Figure 2.2: Subcategories of usage-based insurance and insurance telematics
Figure 2.3: Schematic classification of usage-based & claims-focused insurance telematics
Figure 2.4: Insurance telematics infrastructure overview
Figure 2.5: Examples of principal insurance telematics form factors
Figure 2.6: Examples of feedback from Desjardin’s smartphone app Ajusto
Figure 2.7: Example of a windscreen-mounted Bluetooth device from CMT
Figure 2.8: GDV-Stecker 12 V device
Figure 2.9: Schematic insurance telematics risk rating process
Figure 2.10: Web- and smartphone-based interfaces and dashboards for end-users
Figure 2.11: Mobile network operators in Europe and North America (2016)
Figure 2.12: Mobile operators in Europe by M2M subscriber base (Q4-2014)
Figure 2.13: Mobile operators in North America by M2M subscriber base (Q3-2015)
Figure 2.14: Telematics strategies for insurance providers
Figure 3.1: Growth of insurance telematics at Generali (2012–2015)
Figure 3.2: Overview of the Your Portal interface for insurethebox policyholders
Figure 3.3: User interface and OBD device of Sijox’s AppDrive powered by TomTom
Figure 3.4: Chipin’s OBD device
Figure 4.1: Progressive’s Snapshot OBD-II telematics device supplied by Xirgo
Figure 4.2: State Farms’s Bluetooth-beacon enhanced smartphone app
Figure 4.3: Growth of Allstate’s UBI offer Drivewise (2011–2015)
Figure 4.4: Growth of Esurance’s UBI offer DriveSense (2011–2015)

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