According to a new research report from the IoT analyst firm Berg Insight, the number of insurance telematics policies in force on the European market reached 13.0 million in Q4-2023.
Growing at a compound annual growth rate (CAGR) of 6.2 percent, this number is expected to reach 17.6 million by 2028.
In North America, the number of insurance telematics policies in force is expected to grow at a CAGR of 8.1 percent from 17.9 million in Q4-2023 to reach 26.3 million in 2028. The US, Italy, the UK and Canada are still the largest markets in terms of insurance telematics policies.
The German market has grown in recent years and is Europe’s third-largest market in terms of insurance telematics policies. The Italian insurers UnipolSai and Generali together accounted for close to 50 percent of the telematics-enabled policies in Europe. Insurers with a strong adoption in the UK moreover include Admiral Group and Direct Line. HUK-Coburg and Allianz are currently dominant actors in the German UBI market, accounting for more than 85 percent of the active telematics policies in the country.
In North America, the market is dominated by US-based Progressive, Allstate, Liberty Mutual, Nationwide and State Farm as well as Intact Financial Corporation and Desjardins in Canada.
Aftermarket black boxes largely dominate the European insurance telematics market while smartphone applications followed by self-install OBD-II devices represent the vast majority of the active policies in North America.
Berg Insight expects a continued increase in the uptake of smartphone-based solutions in all markets as well as an increase in the use of OEM telematics data in insurance telematics programs.
The telematics companies targeting the insurance market include insurance-focused specialists dedicated particularly to telematics applications such as UBI, as well as general telematics players that serve other verticals as well. Automotive OEMs are also increasingly taking an active part in the ecosystem and the data streams from line-fitted telematics systems can be used for insurance purposes. Automotive OEMs like Ford, General Motors, Mercedes-Benz, Stellantis, Tesla and Toyota have all launched solutions to enable usage-based insurance for their customers. Solutions combining data from line-fitted telematics systems with data from smartphones are promising as the combined solution can leverage the benefits and limit the drawbacks with each form factor.
Aftermarket telematics are still an important part of usage-based insurance, and many service providers focus on insurance telematics solutions. Leading providers of aftermarket hardware telematics solutions include Octo Telematics, Targa Telematics and Vodafone Automotive. Other providers that to a large degree focus on smartphone solutions include Cambridge Mobile Telematics, Arity, IMS and the Floow.
Smartphone-based insurance telematics solutions are becoming mature solutions now and many insurers have taken advantage of the potential in claims and marketing tools. The uptake of smartphone-based insurance telematics policies is motivated by the low cost for implementation and even lower marginal costs per user. Insurers with smartphone-based telematics products can also increase their customer engagement and loyalty with well-thought-out marketing solutions and gamification features.
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