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?
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.
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