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Europe to Lead Insurance Telematics Market, with More Than 44 Million Subscribers by 2017
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The number of insurance telematics users in Europe will grow from 1.5 million in 2010 to 44 million in 2017, initially driven by the UK and Italy. Despite aggressive efforts from Progressive, North America will continue to lag behind the European UBI market.
ABI Research's Dominique Bonte comments, "While insurance telematics or usage based insurance (UBI) is far from a recent phenomenon, renewed interest in this market has been observed from both established players and new entrants with uptake accelerating and the very nature of UBI changing dramatically from pay as you drive (PAYD) to pay how you drive (PHYD) based on continuous driver behavior monitoring and analysis."
Increasingly, pure UBI is integrated into a wider set of safety and security connected car services. This is not new; in Italy, stolen vehicle tracking was the starting point for insurance telematics and this notion is now spreading to driver behavior monitoring feedback, including sharing and comparing scores on social networks. Insurance telematics is absorbed in and being carried forward by the emerging connected car boom.
While the deaveraged pricing model and fairness principle of UBI to treat customers as individuals and have them pay for the risks they are actually taking instead of premiums depending on inaccurate proxies such as age and gender is gaining acceptance, it remains to be seen whether established insurance companies will back a more open, transparent approach as it relates to data collection and sharing which might slow down the uptake of UBI considerably.
Future growth of UBI will be increasingly driven by smartphones wirelessly connecting to the OBD bus via Bluetooth adapters. The recent announcement from Ford and State Farm to launch insurance telematics via SYNC vehicle health reports constitutes the de facto start of phone-based UBI.
Tags: [m2m] [telematics]
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