INSURANCE TELEMATICS MARKET

KEY FINDINGS

• The key drivers supporting the initiative for insurance telematics are decreasing the cost of development and technology, altering consumer behavior, and stringent government regulations.
• The telematics market for industries such as insurance is anticipated to grow steadily in the next few years, due to decreasing cost of connectivity solutions, such as wireless and cellular modules and use of predictive analysis, enabling the end user to produce drive risk scores from telematics data.
• The rising incorporation of the internet of things (IoT) into passenger and commercial vehicles is propelling the utilization of cloud services in insurance telematics. Cloud enables the tapping of various data related to the device on the go. For instance, a parent can monitor their children’s driving behavior.
• The European insurance telematics market is largely dominated by hardwired aftermarket black boxes, while self-install OBD devices represent the vast majority of the active policies in North America.
• Educating consumers about insurance telematics and security issues associated with cloud and mobile technologies act as challenges for the market. However, the privacy concerns associated with private data of individuals and customers are restraining the growth of the market.
• The Insurance Telematics market is expected to grow at a CAGR of XX% over the forecast period (2021 - 2026).

INTRODUCTION

Telematics insurance usually works by setting up in the vehicle a device, termed usually as a Black Box, which records different metrics of the latter, such as speed, distance, and the type of road one travels.This device also monitors the braking pattern and driving style, which is utilized by insurance companies to compute the premium accordingly.

Insurance telematics market poses the potential to alter the current scenario of motor insurance and positively impact claims, risk selection, and fraud detection.

As of now, the industry is still at a nascent stage of development, and various studies are being conducted by researchers to explore the broadening of its usage across the world.

INSURANCE TELEMATICS MARKET SEGMENTATION

Insurance Telematics Market By Organization Size

• Small and Medium Enterprises (SMEs)
• Large Enterprises

Insurance Telematics Market By Deployment Type

• On-Premise
• Cloud

Insurance Telematics Market By Vehicle Type

• Passenger Vehicles
• Commercial Vehicles

Insurance Telematics Market By Geography

• US
• Europe
• China
• Asia (ex China)
• ROW

INSURANCE TELEMATICS MARKET DYNAMICS

• The key drivers supporting the initiative for insurance telematics are decreasing the cost of development and technology, altering consumer behavior, and stringent government regulations.
• The demand for telematics varies across the world, owing to which the industry players are performing pilot projects to understand customer behavior.
  • For instance, in the United States, consumers prefer usage-based insurance (UBI) snapshot programs, whereas, in the United Kingdom, there are only 2-3% of motor insurance telematics policies.
  • The introduction of insurance telematics has several advantages to the insurer, as well as consumers, which are expected to fuel market growth.
• For consumers, it will promote safe driving, resulting in the mitigation of accident severity and frequency. For the insurers, the claim-handling cost will be reduced by 55%, which is likely to drive the market growth over the forecast period.

INSURANCE TELEMATICS MARKET SIZE AND FORECAST

The Insurance telematics market for industries such as insurance is anticipated to grow steadily in the next few years, due to decreasing cost of connectivity solutions, such as wireless and cellular modules and use of predictive analysis, enabling the end user to produce drive risk scores from telematics data.

Consumer’s enthusiasm for in-car connectivity and growth of smartphone penetration are driving the market.In terms of deployment type, on-premises deployment is expected to dominate the market with the largest market size.In terms of end users, SMEs are estimated to exhibit the highest growth rate as they are adopting cloud-based insurance telematics solutions extensively.

US is expected to lead the overall market followed by Europe and China. US is rapidly deploying insurance telematics solutions due to the dynamic market environment.Latin America and APAC is also witnessing a record growth in demonstrating and adopting insurance telematics solutions.

Educating consumers about insurance telematics and security issues associated with cloud and mobile technologies act as challenges for the market.However, the privacy concerns associated with private data of individuals and customers are restraining the growth of the market.

Organic growth through partnerships, agreements and collaborations are the key strategies followed by the companies, such as Octo Telematics, Sierra Wireless, Inc., Agero Inc., Telogis, and TomTom Telematics.These strategies accounted for a share of 38% of the total strategic developments in the insurance telematics market.

Mergers and acquisitions strategy accounted for 15% of the total strategic developments incorporated by the top insurance telematics companies, such as Sierra Wireless, MiX Telematics, Telogis, and Trimble Navigation.

To know more about Global Automotive Telematics Market, read our report

INSURANCE TELEMATICS MARKETNEW PRODUCT LAUNCH

Tesla launched telematic insurance in three additional US states. Real-time driver data insurance has been made available in Colorado, Oregon, and Virginia by the expanding insurance section of Tesla.

There are now seven states where auto insurance is offered. Tesla Insurance is also offered in California, but due to state rules, it does not provide real-time driver safety data.

Despite having little direct impact on the present insurance market as a whole, a report by Moody's Investor Services claims that Tesla and other automakers are becoming strong competitors to established auto insurers.

There is a tonne of room for technology companies to undercut traditional insurers with their low-cost offerings, as demonstrated by Tesla's own insurance business, which offers auto coverage by analysing real-time driving data to determine accident risk.

In fact, evidence indicates that Tesla may presently offer insurance to traditional insurers at a 20–40% discount. Additionally, by urging the insurance sector to improve its own data-led underwriting, the insurtech has already demonstrated its potential as a significant competitor in the market.

Due to its focus on covering only its own vehicles, Tesla doesn't directly threaten conventional insurers. Nevertheless, as Tesla's market share increases, the competition the technology car manufacturer poses will undoubtedly worsen.

Additionally, experts predict that this will pick up speed if additional automakers introduce their own insurance products.New auto insurance product powered by telematics was launched by Aviva Canada. Safe drivers will receive significant insurance discounts thanks to the new Aviva Journey, an app-based telematics solution.

Customers who sign up for the app can immediately be eligible for a 10% discount on their current auto insurance, and it can be downloaded on smartphones.

By using the Aviva Journey app, their IMS One App mobile telematics technology enables Aviva Canada to gather data insights and provide meaningful contact with its policyholders.

To properly understand how its clients drive and to connect safe driving to financial benefits, the app gathers incredibly detailed data.Prior to the launch, there was a strong sense of teamwork between Aviva and IMS. As a result, we have created a very amazing and captivating mobile app-based product that has been highly appreciated by both our broker partners and customers. 

The insurance company was able to respond to suggestions made by brokers and early adopters. In order to create "an outstanding customer experience," Aviva and IMS have made changes to the app. 

They are happy to be at the forefront of the drive towards personalised premiums based on behavioural data reaching a tipping point for widespread acceptance in North America and beyond.

THEINSURANCE TELEMATICS MARKETRECENT TRENDS

• The rising incorporation of the internet of things (IoT) into passenger and commercial vehicles is propelling the utilization of cloud services in insurance telematics. Cloud enables the tapping of various data related to the device on the go. For instance, a parent can monitor their children’s driving behavior. Furthermore, cloud services can be connected through third-party applications, enabling enhanced customer experience, which is propelling the market growth over the forecast period.
  
• Additionally, it empowers live sharing of data with the concerned person, which is likely to boost the segment’s growth. Incorporating cloud through insurance telematics also offers insights and risks associated with the driver’s driving style, which helps in keeping track of the car’s running activity. 
• In addition, it reduces the extra cost related to data storage, which, compared to on-premise, is expected to fuel the adoption of cloud-based service, thereby, propelling the segment’s growth over the forecast period. 
• The European insurance telematics market is largely dominated by hardwired aftermarket black boxes, while self-install OBD devices represent the vast majority of the active policies in North America. However, several major US insurers have recently shifted to solutions based on smartphones. 
• The Italian insurers, UnipolSai and Generali, together accounted for around 50% of the telematics-enabled policies in Europe. Moreover, insurers with a strong adoption of telematics-enabled policies in the United Kingdom include Admiral Group, Insure, The Box, and Direct Line. Several insurers in the rest of Europe have also shown a substantial uptake of telematics in 2016-2017. 
• Consumer engagement is now the focus of most insurance telematics programs and will continue to be an important topic in the near term in Europe. The European insurance telematics market is still controlled and dominated by insurers in Italy and the United Kingdom, with an estimated 4.3 million and 540,000 policies, respectively. Uptake on all other markets is considerably lesser, with between 50,000 and 100,000 policies in Spain, Austria, and France, and between 10,000 to 20,000 policies in Benelux, Switzerland, Scandinavia, and Germany. 
• Cambridge Mobile Telematics has acquired rival TrueMotion for an undisclosed price in a deal that gives it an expanded presence and capabilities in the global auto insurance market. 
• Just Insure, a pay-per-mile insurance technology company that uses telematics to reward safe drivers and reduce insurer bias, announced it has raised $8 million, bringing its total funding amount to $15 million. 
• The new funds will be used to scale the company and its product offering as it looks to expand into additional states. This funding round was led by CrossCut Ventures, ManchesterStory and Western Technology Investments. 
• Koop Technologies, an insurance technology startup specializing in autonomous vehicle and robotics risk, recently announced $2.5M in seed funding. The round was led by Ubiquity Ventures, along with Bee Partners, Sure Ventures, WestWave Capital, and a number of strategic angel investors. Founded in 2020, Koop is based in Pittsburgh, as three of its four co-founders attended the University of Pittsburgh.

COVID IMPACT ON INSURANCE TELEMATICS  MARKET

The COVID-19 pandemic has resulted in changing demands of insurers from traditional actuarial and underwriting models to pay-as-you-drive (PAYD) models.In addition, increased acceptance of digital tools in the policy binding & claims process among consumers, combined with a need for insurers to design premium policies more precisely are major factors notably contributing towards the market growth.

INSURANCE TELEMATICS  MARKETCOMPETITIVE LANDSCAPE

The insurance telematics market consists of several major players. In terms of market share, almost none of the market players currently have significant dominance in the market.The major players with the prominent share in the market are focusing on expanding their customer base across foreign countries to stay on the top.

Dublin-based RentalMatics, which provides telematics to the car hire sector, has entered a three-year agreement with Queensland-based East Coast Car Rentals as it launches its connected car platform in the Australian market.These companies are leveraging strategic collaborative initiatives to increase their market share and increase their profitability.

The companies operating in the market are also acquiring start-ups working on insurance telematics market technologies to strengthen their product capabilities.

INSURANCE TELEMATICS  MARKETCOMPANY PROFILES

1. Octo Telematics
2. Sierra Wireless, Inc
3. Agero Inc
4. Telogis
5. TomTom Telematics

THISINSURANCE TELEMATICS  MARKETREPORT WILL ANSWER FOLLOWING QUESTIONS

1. Insurance Telematics Market size and Forecast, by region, by application
2. Average B-2-B price for Insurance Telematics Market, by region, per user
3. Technology trends and related opportunity for new Insurance Telematics Market tech suppliers
4. Insurance Telematics Market share of leading vendors, by region,
5. Coronavirus impact on Insurance Telematics Market earnings