According to a new research report from the analyst firm Berg Insight, the number of insurance telematics policies in force on the European market reached 5.3 million in Q4-2015 and 6.3m in North America.
In Europe, annual growth rate (CAGR) is predicted to be 37.2 percent, with the number of policies expected to reach 25.8 million by 2020. In North America, the number of insurance telematics policies in force by 2020 is expected to grow at a CAGR of 45.8 percent to reach 42.1 million in 2020.
The European insurance telematics market is largely dominated by hardwired aftermarket black boxes while self-install OBD devices instead represent the vast majority of all active policies in North America. Several major US providers of UBI have recently shifted to solutions based on smartphones. Berg Insight now expects a rapid increase in the uptake of solutions based on smartphones and also embedded OEM telematics systems in all markets in the upcoming years.
“Canada, the US and Italy in particular have seen a significant increase in the use of telematics-based auto insurance during 2015”
Renowned telematics suppliers active in the insurance field for example include Octo Telematics, Vodafone Automotive and LexisNexis Risk Solutions. Intelligent Mechatronic Systems, Cambridge Mobile Telematics, Modus, Baseline Telematics, DriveFactor and The Floow are also notable players on the market. Automotive OEMs are increasingly taking an active part in the ecosystem. Examples include General Motors, Ford, Renault-Nissan, BMW, Daimler and Fiat. In addition, mobile operators such as Vodafone, Telefónica, Verizon and Sprint are offering insurance telematics solutions, commonly working with telematics partners.
The insurance telematics market is currently in a phase of strong growth in both North America and Europe. “Canada, the US and Italy in particular have seen a significant increase in the use of telematics-based auto insurance during 2015”, said Jonas Wennermark, IoT/M2M Analyst at Berg Insight.
He adds that the UK is also one of the front-runners and that uptake is expected to increase in a number of additional countries in the coming years. Telematics-based insurance has already been introduced in a number of European countries including Spain, Austria, France, Switzerland, Germany, Denmark, Belgium and the Netherlands.
Differentiated telematics offerings are predicted for a broader range of segments, and insurers are increasingly expected to embrace usage-based pricing as well as claims-related insurance telematics and various value-added services. In North America, smartphone based solutions are growing rapidly whereas Europe still largely favours device-based solutions. “We are also seeing a growing involvement from OEMs. Progressive and OnStar are about to launch what might become the first major PHYD offer using OEM data. There are also recent attempts to share OEM data through intermediaries such as Verisk and the Floow”, concluded Mr. Wennerma