Accessing the insurance market represents the most exciting and lucrative opportunity for technology companies in the telematics space. UBI insurance telematics appears to be at a tipping point, and is moving from a niche product to mass-market adoption in the United States and other key European markets, especially Italy and the UK. The potential US Usage Based Insurance (UBI) market is estimated at approximately 1 million vehicles in 2012, climbing to 5 million by the end of 2013 and 60 million by the close of 2019. Italy already boasts over 2 million insurance telematics subscribers, while in the UK, the potential market for is estimated to be as high as 60% of motor insurance customers. The US is estimated to have 60 million vehicles insured with insurance telematics concepts by 2019.
This insurance telematics Report 2013 comes at a break-through moment for insurance telematics.
Insurers and other stakeholders in the telematics ecosystem, including mobile network operators (MNOs), automotive original equipment manufacturers (OEMs), telematics service providers (TSPs), and aftermarket suppliers, are applying new business models to exploit the potential of telematics technology by enabling insurers to o ffer insurance policies that are tailored to a policyholder’s driving patterns and performance. These initiatives have the potential to transform the automotive insurance market.
Questions the report will answer:
- Insurance Telematics appears to be at a tipping point, and is moving from a niche product to mass-market adoption in the United States and other key European markets, especially Italy and the UK. The United States is the largest telematics insurance market, with approximately 1 million UBI vehicles in 2012, which is expected to 5 million by the end of 2013.When will the United States market reach critical mass?
- The insurance telematics is fragmented, with diverse factors prompting initiatives globally. Driven by the first mover advantage, fraud reduction and cost control, a wide variety of partnerships and important new initiatives have developed. How are your competitors establishing themselves in the insurance telematics value chain?
- The return on investment from insurance telematics is a subject of continuing debate, given the emergence of Value Added Services, adjustment of risk models and the reduction in fraudulent claims. Given the decreasing cost of UBI devices, what will the value proposition look like to the consumer in 2014?
Who needs this report?
- Business Development executives need to understand the range of potential partners, their priorities and how the market will develop.
- Automotive insurance-focused executives need to understand how the automotive insurance market is developing and how this will impact business models.
- Product development executives need to understand how their competitors are developing insurance telematics products and where innovation is occurring.
Previous Report buyers
Telematics Update engaged in extensive consultation with more than 25 leading industry figures to define research gaps and provide the most up-to-date, informed analysis of industry trends and needs. All research was guided by the input of an advisory panel of industry consultants, to ensure that the report focused on real world industry needs and objectives. Where appropriate, insights gleaned from these interviews are supported by survey data, and publicly-available secondary research.
Breakdown of TU’s Insurance survey, October 2012
Telematics Update realizes that the state of the industry is in considerable flux. Companies are putting forward new business models and new products all the time. At this point, it is impossible to say which of these approaches may prove most competitive. In fact, it is precisely this uncertainty about the relative advantages of alternative approaches being pursued that has led us to create this report at this time. Rather than attempting to impose consensus on issues where considerable debate continues about optimal business strategies, and forecasts, among other issues, this report sets out competing points of view, to allow readers to get a clear sense of possibilities.
The Telematics Update team sought out the expertise of a wide range of industry executives. The October 2012 survey was conducted with confirmed a broad cross section of insurance focused industry executives.
Key methodology statistics:
- Peer reviewed by 4 industry experts
- 25+ executive interviews
- 6 month research project
- Commissioned based on executive demand and feedback
- A month of design, editing and refinement
- Two industry surveys to approximately 400 insurance telematics focused executives
- Industry reviews
- Thought leadership
- About Telematics Update
- List of figures
- List of tables
- Executive summary
- 1. Introduction
- 1. Market analysis
- 1.1 Executive summary
- 1.2 Introduction: Insurance telematics market
- 1.3 ROI for insurers
- 1.4 Durability of the insurance telematics market
- 1.5 Market drivers
- 1.6 Market challenges
- 1. Market analysis
- 2. Regional breakdown
- 2.1 Executive summary
- 2.2 United States
- 2.3 Europe
- 2.4 Italy
- 2.5 United Kingdom
- 2.6 Latin America
- 2.7 South Africa
- 3. Consumer analysis
- 3.1 Executive summary
- 3.2 Price and insurance telematics adoption
- 3.3 What do consumers want: Value Added Services
- 3.4 Policies to encourage renewal and retention
- 3.5 Business models and driver feedback
- 4. Market challenges
- 4.1 Executive summary
- 4.2 Data: collection and analysis
- 4.3 Data sharing and portability
- 4.4 Technological evolution
- 4.5 Summary
- 5. Evolution of the insurance telematics ecosystem
- 5.1 Executive summary
- 5.2 Telematics value chain and existing partnerships
- 5.3 Who will the gatekeepers be?
- 5.4 Summary
- 6. Regulatory landscape
- 6.1 Executive summary
- 6.2 Intellectual property issues
- 6.3 State-based insurance regulation in the US
- 6.3.1 California
- 6.3.2 Texas
- 6.3.3 Michigan
- 6.3.4 Washington
- 6.3.5 Illinois
- 6.4 Privacy and consumer protection
- 6.5 Social concerns
- 6.6 Emergency services
- 6.7 Connected vehicles and safety
- 6.8 Enforcement: modifying driver behaviors
- 6.9 Traffic congestion, emissions, and climate change
- 6.10 Revenue collection and infrastructure financing
- 6.11 Summary
- 7. Case studies
- 7.1 Discovery Insure
- 7.2 Liberty Mutual Onboard Advisor
- 7.3 Wunelli
- 8. Market prospects and growth direction
- 9. Industry learning
- Project definition
- Report approac
- List of acronyms
- Figure 1: Global overview of insurance providers that have launched insurance telematics
- Figure 2: Leading insurance telematics players (including device manufacturers, solutions providers, and
- Figure 3: Survey estimates of when insurance telematics will go mainstream
- Figure 4: Expected impact of telematics on the US insurance industry
- Figure 5: Evolution of insurance telematics toward more Value Added Services
- Figure 6: Estimated size of US personal lines insurance telematics market, 2012-2019
- Figure 7: Insurance telematics US value proposition calculation, 2012-2013
- Figure 8: Progressive calculations of adjusted loss ratio by insurance telematics group
- Figure 9: Tech expense ratio for Progressive’s Snapshot product
- Figure 10: Growth drivers of the US insurance telematics market
- Figure 11: Impediments to wider adoption of insurance telematics
- Figure 12: Long-term hurdles to insurance telematics adoption
- Figure 13: iPhone 4S specifications
- Figure 14: Average expenditures on auto insurance, 1994-2012
- Figure 15: Average outlay on auto insurance, 1994-2012 (as adjusted for inflation)
- Figure 16: CFA consumer survey results on the factors used to set insurance premiums
- Figure 17: States in which Progressive offers insurance telematics policies
- Figure 18: US insurers offering insurance telematics products (as of November 1, 2012)
- Figure 19: Progressive branding approach, screen shot
- Figure 20: State Farm branding approach, screen shot
- Figure 21: Teensurance branding approach, screen shot
- Figure 22: European automotive insurance market
- Figure 23: Increase in insurance telematics policies in Italy post-Monti decree
- Figure 24: UK insurance aggregators
- Figure 25: First and second wave of selected insurance telematics products
- Figure 26: Insurance telematics gender driving performance data for UK market
- Figure 27: Privacy vs. discount trade-off
- Figure 28: USD cost of full-featured OBDII devices, 2009-2013
- Figure 29: USD costs of OBD II device with limited feature set, 2011-2013
- Figure 30: What do UK customers value in insurance telematics and Value Added Services?
- Figure 31: Ancillary services role in the future success of insurance telematics
- Figure 32: US total repair and replacement receipts, 2011
- Figure 33: US insurance telematics value chain
- Figure 34: Who will the gatekeepers for insurance telematics be?
- Figure 35: Potential insurance telematics business models
- Figure 36: Market prospects for the role of Telecommunications in insurance (2013-2033+)
- Figure 37: States that include PAYD in their climate action plans
- Figure 38: Onboard Advisor savings calculator
- Figure 39: Probability of fault accident by Driving DNA™
- Figure 40: Summary of Wunelli’s historical vehicle usage data
- Figure 41: Market prospects for Pay How You Drive adoption (2013-2033+)
- Figure 42: Market prospects for vehicles employing insurance telematics
- Figure 43: Market anticipation of future privacy regulations
- Figure 44: Breakdown of survey respondents
- Table 1: Major insurance telematics paradigms in personal auto insurance
- Table 2: Estimated size of US insurance telematics market, 2012-2019
- Table 3: Top 10 US auto insurers by market share of premiums written
- Table 4: Growth in auto insurance expenditures (1994-2012)
- Table 5: Growth in average outlay on auto insurance, 1994-2012 (as adjusted for inflation)
- Table 6: European insurance industry concentration, 2001-2010
- Table 7: Auto insurance market in Italy
- Table 8: Auto insurance market in the United Kingdom
- Table 9: Progressive patent lawsuits filed (as of November 13, 2012)
- Table 10: Market prospects for vehicles employing insurance telematics
- Table 11: Market anticipation of future privacy regulations
Purchase the report in less than 60 seconds...
If you have any questions about the report please contact me on the details below.
+ 44 (0) 207 375 7517 / 1 800 814 3459 ext. 7517
7-9 Fashion Street, London E1 6PX, UK