Global Insurance Telematics Market - Segmented by Deployment (Cloud, On Premise), Offering (Hardware, Software), Type (Pay-As-You-Drive, Pay-How-You-Drive, Pay-As-You-Go), End-User Application (Personal line, Commercial Life, Fleet Level), and Region - Growth, Trends, and Forecast (2018 - 2023)
The global insurance telematics market is expected to grow at a CAGR of 18.49%, over the forecast period (2018 - 2023). The regions considered within the scope of the report include North America, Europe, Asia-Pacific, Latin America, and Middle East & Africa.
Owing to the increasing smartphones penetration, escalating applications of IoT, rising adoption of cloud computing buoyed by the developments in in-car connectivity at optimal costs, and favorable government regulations supporting consumers, particularly in case of safety and security about vehicles, are the major factors driving the market for insurance telematics. The deployment of insurance telematics applications on the cloud or dedicated data center infrastructure has been an upward trend over the recent past. The cloud-based deployment of insurance telematics solutions is essential as it offers a flexible and scalable infrastructure to handle multiple devices and analyze the huge data emerging from multiple sensors installed on vehicles.
However, lack of awareness about advanced technologies and security concerns related to the cloud, and mobile technologies and the privacy of individuals are the major factors which may hinder the growth of the market.
Increasing Adoption Of Mobile Telematics By Insurance Companies To Propel The Market Growth
With the evolution of technology, automobiles and mobile devices are witnessing increased integration, and mobile telematics systems are having an intense impact on the automotive industry as they allow insurers to learn more about their customers. One of the fascinating areas of growth is mobile-based data collection and the use of smartphones to learn about driver behavior. The usage-based insurance (UBI) and insurance telematics are completely changing the way insurance industry functions with expected customer demands for UBI to grow over 140 million subscribers globally by 2023, according to IMS. Telematics devices installed in a vehicle enable an insurance provider to have more precise information to rate driver’s premiums, such as the time of day while driving, on-road activity (including braking and cornering speed or acceleration), and the amount of time spent behind the wheel. Furthermore, mobile-based software application distribution systems are so readily available, it’s relatively simple for insurance providers to launch telematics-based programs for their clients. Custom apps provide insurance providers with an easy way to offer clients training, coaching, and advice.
Pay-How-You-Drive (PHYD) To Mark a Significant Trend in the Market
Manufacturers are engaged in producing faster and more powerful vehicles, which are connected and have the ability of autopilot. In the process of evolution, the insurance companies are offering newer and upgraded insurance plans to support the growing connected cars industry. With insurers and policyholders swiftly embracing new technologies and looking for ways to reduce costs, Pay-How-You-Drive (PHYD) insurance offerings will expand across the globe over the coming years, with innovative insurers leading the way. The sale of car insurance based on telematics, including PHYD policies, has increased significantly over the past year as it is a behavior-based insurance plan that takes into account the driving behavior patterns. The PHYD model incorporates a large number of parameters allowing the accurate estimation of the risk involved with the driving. The outcome of the PHYD model can be an individual risk indicator that will depict the risk associated with the driving behaviour of a user. Many organizations in major countries such as the United States, Canada, France, Japan, Germany, etc. have started using PHYD telematics to manage insurance costs for their fleets. This includes government and commercial fleet, public transportations, driving schools, etc.
North America is Expected to Dominate the Insurance Telematics Market in the Forecast Period
The North American insurance telematics market is currently in a strong growth phase, with the United States being one of the frontrunners. The market in the region is primarily impacted by the evolution of new insurance ecosystem, which includes the growth of embedded telematics solutions and increasing adoption by carriers and individuals. The regulatory changes are also supporting the adoption rate of telematics. Automotive manufacturers are increasingly integrating telematics to monitor system failures and vehicle performance. In the United States, the number of new vehicles sold with embedded telematics is likely to reach 80% of cars on the road. The increase in vehicles with embedded devices is expected to reduce device prices, encourage innovation and make it easier for insurers and customers to adopt insurance telematics products. Moreover, rapid innovations in mobile technology and connectivity are also impacting the telematics-supported insurance market. Smartphone penetration in North America is growing exponentially, and its ability to wirelessly connect to onboard devices using Bluetooth, is expected to fuel the insurance telematics growth. This is easy for insurers: to use mobile telematics applications to track the driving activity and behaviors of anyone with a smartphone.
Key Developments in the Market
March 2017 - Trimble and Caterpillar Inc. partnered to bring on-highway telematics to construction operations. The collaboration extended Caterpillar's CAT Connect solutions to include Trimble's real-time, truck fleet visibility and monitoring capabilities, and enabled both on-highway and off-highway fleet management.
August 2017 - Octo Telematics and Agero Inc. had partnered to deliver an integrated crash management solution to enable carriers to respond more proactively and quickly to any crash situation, and will permit insurance carriers to improve First Notice of Loss (FNOL) services and savings. The strategic partnership provides carriers with a greater ability to reduce the overall cost of claims while improving customer satisfaction.
Major Players: AGERO INC., SIERRA WIRELESS, TRIMBLE NAVIGATION, VERIZON ENTERPRISE SOLUTIONS, and OCTO TELEMATICS, amongst others.
Reasons to Purchase the Report
Impact of growth of cloud applications on the market
Analyzing various perspectives of the market with the help of Porter’s Five Forces analysis
Growth of various telematics solutions, such as smartphones and hybrid solutions
Regional analysis of the market
Identify the latest developments, market shares, and strategies employed by the major market players
3 month analyst support, along with the Market Estimate sheet (in excel)
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