Insurance Telematics in Europe and North America is thefourth strategy report from Berg Insight analysing the latestdevelopments on the insurance telematics market.
This strategic research report from Berg Insight provides youwith 270 pages of unique business intelligence including 5-yearindustry forecasts and expert commentary on which to base yourbusiness 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 60 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 2023.
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 insurance telematicsmarket?
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 summaryThe integration of telematics technology constitutes the latest revolution for the automotiveinsurance industry. The concept of telematics is a portmanteau of telecommunications – longdistancecommunications – and informatics – the science of information. Telematics ingeneral thus refers to the collection of information related to remote objects such as vehiclesvia telecommunications 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 299 millionvehicles were in use in the EU23+2 in 2017, including over 259 million passenger cars. InNorth America, an estimated total of around 286 million vehicles were in use in 2017, out ofwhich passenger cars and light trucks are estimated to represent almost 271 million vehicles.
Some kind of basic automotive insurance is mandatory in most developed countries andthere are in addition a number of subcategories of insurance that provide coverage fordifferent types of unforeseen events involving motor vehicles. Motor gross written premiumsin EU23+2 reached a total of over € 132.3 billion in 2017. The equivalent number for NorthAmerica was US$ 231 billion (€ 204 billion) in 2017.
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 10.3 million at the end of 2018. Growing at a compound annualgrowth rate of 36.0 percent, the number of insurance telematics policies in force in Europe isestimated to reach 47.9 million by 2023. In North America, the total number of insurancetelematics policies in force is forecasted to increase from an estimated 10.6 million policies atthe end of 2018 to reach 49.8 million policies by 2023, representing a compound annualgrowth rate of 36.2 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 North American insurance carriers are also exploring claims-relatedinsurance telematics as well as adding distracted driving parameters in UBI. The Europeaninsurance telematics market is still dominated by insurers in Italy and the UK, with anestimated 7.7 million and 1.2 million policies respectively. Uptake on all other markets isconsiderably lower, with between 150,000 and 300,000 policies in Spain, France andGermany, and 40,000–70,000 policies in Scandinavia, Switzerland, Austria and Benelux.
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.Targa Telematics, Redtail Telematics, Trak Global Group, Cambridge Mobile Telematics, TheFloow, TrueMotion, Modus, CalAmp, Mobile Devices and Scope Technology are also notableplayers on the market. Automotive OEMs are increasingly taking an active part in theecosystem. Examples include General Motors, Honda, Renault-Nissan, BMW, Daimler andHyundai. 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 2017–2018include Octo Telematics’ acquisition of the UBI assets of Willis Towers Watson including theDriveAbility Score and Trak Global Group’s acquisition of IMS.
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