Insurance Telematics settles into the fast lane

Ian Scales
By Ian Scales

Apr 24, 2019

via Flickr © woodleywonderworks (CC BY 2.0)

via Flickr © woodleywonderworks (CC BY 2.0)

  • Millions are taking up the Telematics insurance policies
  • In North American and most of Europe it’s growing by about a third a year
  • Now the auto manufacturers are getting in on the act

Remember the attention garnered by Insurance Telematics a few years back? Then it didn’t have that name and the best we at TelecomTV could manage was a description along the lines of: “This is car insurance where the premium rate you pay is determined by your safe driving skills as reported back to the insurance company (or its telematics provider) from sensors in the car. The more Jeremy Clarkson your driving behaviour the more you pay.”

So 2013 saw what must have been our first mention of the emerging application and by 2016 it had become a real thing when we filmed at the Internet of Insurance.

Several of our interviewees expressed reservations about how well or how quickly the established insurance industry would take the new telematics possibilities on board (see - Has the insurance industry even begun to understand what is happening to it?).

In the intervening few years the hype has crested the Gartner curve and is somewhere on the other side.

So has the whole exercise fallen flat? Or has it simply steadily gained ground to the point where less needs be said about it?

According to Berg Insight it appears to be the latter. The analyst firm reports that Europe and North America had reached 20.9 million active insurance telematics policies in 2018 -

There are 10.3 million telematics policies in force on the European market in Q4-2018, but booming away at a compound annual growth rate (CAGR) of 36.0 per cent, they’re expected to reach 47.9 million by 2023.

In North America, the number of policies in force is expected to grow at 36.2 per cent from 10.6 million in Q4-2018 to reach 49.8 million in 2023.

Berg says the US, Italy, the UK and Canada are still the largest markets in terms of  policies.

The European insurance telematics market is largely dominated by hardwired aftermarket blackboxes while self-install OBD devices and mobile applications represent the vast majority of the active policies in North America a trend to mobile apps that is expected to continue with a   rapid increase in the uptake of smartphone-based solutions in all markets as well as an increase in the use of OEM telematics data in insurance telematics programmes.

The insurance telematics value chain spans multiple industries including a large ecosystem of companies extending far beyond the insurance industry players. Automotive OEMs show an increasing interest in insurance telematics. Examples include General Motors, Honda, BMW, Daimler, Hyundai, Toyota and FCA. “The vehicle manufacturers are expected to drive the development of insurance telematics by offering the possibility to utilise connected car OEM data in pay-how-you-drive offers”, said Martin Svegander, IoT analyst at Berg Insight.

He points out that the last few years have seen attempts to share data between various service providers through intermediates. “The rise of marketplaces and data exchanges enables insurers to utilise telematics data from a vast range of data collection techniques as long as the policyholders agree to share their driving data”, concluded Mr. Svegander.

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