Connected Cars in Insurance - Thematic Research

Connected Cars in Insurance - Thematic Research

Summary

GlobalData forecasts that the connected car market will be worth $58.5bn by 2030, up from its $27.2bn evaluation in 2020 at a compound annual growth rate (CAGR) of 7.9%. A great proportion of the connected car market’s growth will not only be due to year-on-year expansion of connected vehicles on roads, but also due to the utilization of telematics technology. The expansion of the connected car market flags the potential for insurers to integrate personalized aspects to how motor insurance premiums are priced by utilizing vehicle data. Connected cars will lay the groundwork for insurers to access millions of data points generated by a vehicle's ability to engage with other devices through the Internet of Things. Connected cars will assist insurers in developing increasingly accurate pricing strategies for customers.

This report provides an in-depth analysis of the connected cars in insurance theme. It provides a thorough overview of the space, covering market size and claims, contextual and economic factors, regulations, and opportunities. The report also explores how the development of connected cars will impact the insurance value chain.

Scope

• As connected cars have automatic data-generating capabilities, vehicle manufacturers will play an increased role in the distribution of motor insurance. Insurers will strike partnerships with manufacturers in order to ensure they have access to consumers’ driving data.
• While there are insurers and insurtechs that are pushing efforts to create more personalized products in private motor, insurtechs are the ones that have adapted telematics to create usage-based insurance services to price premiums. Meanwhile, insurers have utilized telematics to mitigate aspects of risks related to claims and reward customers for “good” driving behavior.
• Insurers that do not gain experience in connected vehicle data risk falling behind their rivals. Connected vehicles produce a massive amount of data, and insurers must build their capabilities and capacity to manage it.

• Benchmark yourself against the rest of the market.
• Ensure you remain competitive as new innovations and insurance models begin to enter the market.
• Be prepared for how regulation will impact the use of connected cars in insurance over the next few years.