Insurance TelematicsUBI Solutions

Insurance telematics projects strong growth in Europe & North America

Published: June 20, 2016

The introduction of telematics technology in the context of automotive insurance is commonly referred to as usage based insurance (UBI) or insurance telematics. Solutions of this type generally enable automotive insurers to improve pricing mechanisms based on actual driving data, gain better control of claims and differentiate their offerings to current and prospective policy holders. Variants of insurance telematics, which have been popularised over the years include behaviour-based pricing models such as PayAs-You-Drive (PAYD), Pay-How-You-Drive (PHYD) and Manage-How-You-Drive (MHYD).

A total of around 282 million vehicles were in use in EU23+2 in 2014, including over 246 million passenger cars. In North America, an estimated total of around 276 million vehicles were in use in 2014, out of which passenger cars and light trucks are estimated to represent almost 263 million vehicles. Some kind of basic automotive insurance is mandatory in most developed countries and there are moreover a number of subcategories of insurance that provide coverage for different types of unforeseen events involving motor vehicles. Motor gross written premiums in EU23+2 reached a total of over € 125 billion in 2014. The equivalent number for North America was US$ 215 billion (€ 162 billion) in 2014.

The nascent insurance telematics market is currently in a phase of strong growth, which is expected to accelerate in the coming years. Europe and North America so far represent the vast majority of all insurance telematics programmes and active policies from an international perspective, and the front-running national markets include the US, Italy and the UK. Berg Insight estimates that the total number of insurance telematics policies in force on the European market reached 5.3 million at the end of 2015.

Insurers with notable presence in the insurance telematics market include Progressive, UnipolSai, State Farm, Allstate, Generali, Allianz, Intact and Insure The Box. Moreover, 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, The Floow, Modus, Baseline Telematics and DriveFactor are also among some notable players on the market.

Source: Berg Insight

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