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Insurance Telematics in Europe and North America – 3rd Edition

Insurance Telematics in Europe and North America is thethird strategy report from Berg Insight analysing the latestdevelopments on the insurance telematics market.This strategic research report from Berg Insight providesyou with 230 pages of unique business intelligence including5-year industry forecasts and expert commentary on which tobase your business decisions.

Highlights from this report:

Insights from 30 new executive interviews with market leadingcompanies.
Comprehensive overview of the insurance telematics value chainand key applications.
In-depth analysis of market trends and key developments.
Case studies of more than 50 insurance telematics initiatives.
Summary of the involvement of vehicle OEMs and mobileoperators.
New data on vehicle populations in Europe and North America.
Market forecasts by country lasting until 2021.

This report answers the following questions:

What types of insurance telematics products are offered on themarket?
Which are the leading providers of insurance telematicstechnology?
What business models are available for insurers entering theinsurance telematics space?
Which are the dominant technology form factors on eachmarket?
Which are the most successful insurance telematics programstoday?
How are mobile operators approaching the insurancetelematics market?
How are the vehicle OEMs involved in the ecosystem?
Which are the major drivers and barriers for insurancetelematics adoption?
Which are the key future trends in this industry?


Executive summary

The integration of telematics technology constitutes the latest revolution for the automotiveinsurance industry. The concept of telematics is a portmanteau of telecommunications – longdistancecommunication – and informatics – the science of information. Telematics in generalthus refers to the collection of information related to remote objects such as vehicles viatelecommunication networks. The introduction of telematics technology in the context ofautomotive insurance is commonly referred to as usage-based insurance (UBI) or insurancetelematics. Solutions of this type generally enable automotive insurers to improve pricingmechanisms based on actual driving data, gain better control of claims and differentiate theirofferings to current and prospective policyholders. Variants of insurance telematics whichhave 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 283 millionvehicles were in use in EU23+2 in 2016, including over 247 million passenger cars. In NorthAmerica, an estimated total of around 276 million vehicles were in use in 2016, out of whichpassenger cars and light trucks are estimated to represent almost 262 million vehicles. Somekind of basic automotive insurance is mandatory in most developed countries and there arein addition a number of subcategories of insurance that provide coverage for different typesof unforeseen events involving motor vehicles. Motor gross written premiums in EU23+2reached a total of over € 125 billion in 2015. The equivalent number for North America wasUS$ 214 billion (€ 183 billion) in 2016.

The nascent insurance telematics market is currently in a phase of strong growth which isexpected to accelerate in the coming years. Europe and North America so far represent thevast majority of all insurance telematics programmes and active policies from an internationalperspective, and the front-running national markets include the US, Italy and the UK. BergInsight estimates that the total number of insurance telematics policies in force on theEuropean market reached 6.8 million at the end of 2016. Growing at a compound annualgrowth rate of 34.8 percent, the number of insurance telematics policies in force in Europe isestimated to reach 30.0 million by 2021. In North America, the total number of insurancetelematics policies in force is forecasted to increase from an estimated 7.0 million policies atthe end of 2016 to reach 35.2 million policies by 2021, representing a compound annualgrowth rate of 38.2 percent.

In the US, the top three insurers in terms of UBI policies have all introduced smartphonebasedsolutions to supplement or replace the previously used OBD dongles. Several US andCanadian insurers have during the recent year re-assessed and re-launched their telematicsprogrammes. The European insurance telematics market is still dominated by insurers in Italyand the UK, with an estimated 5.3 million and 0.79 million policies respectively. Uptake on allother markets is considerably lower, with between 50,000 and 100,000 policies in Spain,Germany, Austria and France, and between 20,000–30,000 policies in Benelux, Switzerlandand Scandinavia.
The insurance telematics value chain spans multiple industries. Insurers with notablepresence in the insurance telematics market include Progressive, UnipolSai, State Farm,Allstate, Generali, Allianz, Admiral, AXA, Liberty Mutual, Intact and Insure The Box. Insuranceplayers can either develop telematics programmes independently or rely on partners tovarying degrees. Renowned telematics suppliers active in the insurance field for exampleinclude Octo Telematics, Vodafone Automotive, Viasat Group and LexisNexis Risk Solutions.Intelligent Mechatronic Systems, Cambridge Mobile Telematics, The Floow, TrueMotion,Modus and Scope Technologies are also notable players on the market. Automotive OEMsare increasingly taking an active part in the ecosystem. Examples include General Motors,Ford, Renault-Nissan, BMW, Daimler and Fiat. The insurance telematics market has seensignificant M&A activity in recent years, involving diverse players from many parts of theecosystem. Notable deals in 2015 include Generali Group’s acquisition of the UK start-upMyDrive Solutions and CCC Information Services’ acquisition of DriveFactor. In 2016, WillisGroup and Towers Watson merged and Intact Insurance made an investment in Metromile.Later in 2016, Metromile acquired Mosaic Insurance. In 2017, the most noteworthy deal wasOcto Telematics’ acquisition of the UBI assets of Willis Towers Watson.

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 over 3.1 million blackboxes
3.2.2 Generali continues to grow and surpasses 1.3 million active policyholders
3.2.3 Allianz’s dedicated Telematics subsidiary serves several European operations 72
3.2.4 AXA offers its insurance telematics portfolio in multiple European countries
3.2.5 Admiral Group reached 200,000 active insurance telematics policies in 2016 .. 79
3.2.6 Insure The Box has sold 750,000 blackbox-based policies in the UK
3.2.7 Direct Line grows rapidly in the UK and has over 100,000 active UBI policies .. 84
3.2.8 Aviva Drive app has reached over 600,000 downloads in the UK
3.2.9 UK-based Ingenie expands its portfolio providing B2B services
3.2.10 Towergate’s iKube policies are powered by TomTom Telematics
3.2.11 Fiat, Volkswagen and MINI works with Carrot Insurance and Trak Global
3.2.12 Marmalade targets young drivers
3.2.13 RSA has launched UBI programmes in the UK, Canada and Norway
3.2.14 Coverbox offers PHYD to older drivers in the UK
3.2.15 Autoline launches Chillidrive powered by Inzura
3.2.16 Telefleet Insurance and Masternaut partners for fleet insurance
3.2.17 PSA Finance UK offers telematics-based insurance to young drivers
3.2.18 BMW’s ConnectedDrive enables UBI powered by Allianz in the UK
3.2.19 Renault-Nissan Alliance partners with The Floow
3.2.20 Daimler Financial Services offers UBI in Belgium, France and Germany
3.2.21 HUK-Coburg offers PHYD for young drivers in Germany
3.2.22 VHV’s Telematik Garant uses a 12V device with built-in connectivity
3.2.23 German insurer Signal Iduna launches UBI based on TomTom OBD device .. 101
3.2.24 Telefónica moves to smartphone-only solutions
3.2.25 UNIQA SafeLine powered by Dolphin Technologies has a focus on safety
3.2.26 Groupama in France has launched PHYD insurance
3.2.27 Chipin has 5,000 insurance telematics end users on the Dutch market
3.2.28 Spanish MAPFRE Group has also launched insurance telematics in the US
3.2.29 ÖSA and Sparkassen Versicherung offers eCall services in Germany
3.2.30 GDV launches eCall service with 46 participating German insurers
3.2.31 Zavarovalnica Triglav works with Amodo to bring UBI to Eastern Europe
3.2.32 HDI Global SE provides telematics-based fleet insurance in the UK
3.2.33 Springworks powered Telia Sense is used by Folksam and Alka
3.2.34 Paydrive offers UBI in Sweden powered by Scope Technologies
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 launched its mobile programme in December 2016
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 Liberty Mutual offers both commercial and personal lines insurance telematics .. 125
4.2.6 Allstate’s subsidiary Arity expands its offering to external customers
4.2.7 Desjardins offers smartphone app for insurance telematics in Canada
4.2.8 Nationwide works with Octo Telematics, IMS, LexisNexis and TrueMotion
4.2.9 Farmers offers insurance telematics for commercial lines powered by Modus 130
4.2.10 Toyota and Aioi Nissay Dowa form telematics insurance services company .. 130
4.2.11 iA Financial Group will pause its insurance telematics programme in 2018
4.2.12 Sprint is no longer actively pursuing insurance telematics
4.2.13 Root Insurance is a smartphone-based insurance company
4.2.14 Mobileye and Munich Re collaborate to reduce fleet accidents in the US
4.2.15 True Mileage uses NFC and works with Ohio Mutual Insurance Group
4.2.16 VOXX offers insurance telematics via its connected car offerings
4.2.17 Spireon adds insurance telematics to its NSpire platform
4.2.18 GM OnStar joins Verisk Telematics Data Exchange as the first OEM
4.2.19 CMT powers multiple smartphone-based pilots across the US
4.2.20 Samsung enters the telematics market by launching Samsung Connect Auto140
4.2.21 Intact has sold 350,000 UBI policies in Canada
4.2.22 Metromile is now a full-service car insurance company
5 Market forecasts and trends
5.1 Market analysis
5.1.1 Insurance telematics policies and penetration in Europe and North America . 144
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 183
5.4.5 New data exchanges expected to make OEM data available to small insurers 184
5.4.6 Commercial applications to grow alongside personal lines insurance telematics184
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 Insurance telematics aims to reduce distracted driving
5.4.10 Mobility trends provide new opportunities for telematics-based insurance
5.4.11 Vehicle diagnostics data from connected cars can create value for insurers .. 187
5.4.12 Outlook: Insurance telematics is growing rapidly in other regions
5.4.13 The importance of consumer engagement rises rapidly
5.4.14 Autonomous cars alter the playing field for motor insurance
6 Company profiles and strategies
6.1 Agero
6.2 Agnik
6.3 Amodo
6.4 Baseline Telematics
6.5 Bosch Connected Devices and Solutions
6.6 CalAmp
6.7 Cambridge Mobile Telematics
6.8 CCC Information Services
6.9 Dolphin Technologies
6.10 Geotab
6.11 Greater Than
6.12 IMETRIK Global
6.13 Intelligent Mechatronic Systems
6.14 Insure Telematics Solutions
6.15 Inzura
6.16 Meta System
6.17 Modus
6.18 MyDrive Solutions
6.19 LexisNexis (Wunelli)
6.20 Octo Telematics
6.21 Quartix
6.22 Redtail Telematics
6.23 Scope Technologies
6.24 Teletrac Navman
6.25 The Floow
6.26 TomTom Telematics
6.27 Trakm8
6.28 TrueMotion
6.29 Verisk Analytics
6.30 Viasat Group
6.31 Vodafone Automotive
6.32 Willis Towers Watson
6.33 Zurich Fleet Intelligence
Glossary
Index
List of Figures
Figure 1.1: Vehicles in use (EU23+2 2016)
Figure 1.2: Passenger car density per 1,000 inhabitants (EU28 2014)
Figure 1.3: Passenger car registrations by manufacturer (EU + EFTA 2016)
Figure 1.4: Vehicles in use (North America 2016)
Figure 1.5: Passenger car registrations by manufacturer (North America 2016)
Figure 1.6: Motor insurance statistics (EU23+2 2015)
Figure 2.1: Distribution of fatal crashes by day of week and time of day (US 2015)
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 Progressive’s smartphone app Snapshot
Figure 2.7: Example of a windscreen-mounted Bluetooth device from CMT
Figure 2.8: GDV-Stecker 12 V device provided by Bosch
Figure 2.9: Folksam’s in-cabin driver feedback device.
Figure 2.10: Schematic insurance telematics risk rating process
Figure 2.11: Web- and smartphone-based interfaces and dashboards for end-users
Figure 2.12: Mobile network operators in Europe and North America (2017)
Figure 2.13: Mobile operators in Europe by M2M subscriber base (Q2-2016)
Figure 2.14: Mobile operators in North America by M2M subscriber base (Q2-2016)
Figure 2.15: Telematics strategies for insurance providers
Figure 3.1: Growth of insurance telematics at Generali (2012–2016)
Figure 3.2: Allianz’ top telematics markets (Q4-2017)
Figure 3.3: Overview of the Your Portal interface for insurethebox policyholders
Figure 3.4: Direct Line’s reward app Shotgun
Figure 3.5: 12V device from VHV
Figure 3.6: User interface and OBD device of Sijox’s AppDrive powered by TomTom
Figure 3.7: 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 (2011–2016)
Figure 4.4: Growth of Esurance’s UBI offer DriveSense (2011–2016)
Figure 4.5: Mobileye’s aftermarket ADAS system
Figure 4.6: Schematic overview of Intact’s coverage for Uber drivers
Figure 5.1: Insurance telematics policies and penetration (Europe 2016–2021)
Figure 5.2: Insurance telematics policies and penetration by region in Europe
Figure 5.3: Insurance telematics policies and penetration (North America 2016–2021)
Figure 5.4: Insurance telematics policies by country (North America 2016–2021)
Figure 5.5: Distribution of insurance telematics form factors (Europe 2016–2021)
Figure 5.6: Distribution of insurance telematics form factors (North America 2016–2021)
Figure 5.7: Key players in the insurance telematics value chain
Figure 5.8 Leading insurance telematics programmes in Europe and North America
Figure 5.9: Examples of telematics hardware providers serving the insurance space
Figure 5.10: M&As in the insurance telematics space (2014–2017)

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