Insurance telematics subscriptions are expected to increase 81 percent on a compound-annual-growth rate to 107 million in 2018 from 5.5 million at the end of 2013, according to “Usage Based Insurance and Safety Telematics Synergies” from ABI Research, which offers analysis and quantitative forecasting of trends in global connectivity and emerging technologies.
“With Progressive’s Snapshot having attracted more than 1 million drivers in the [United States] and Octo Telematics already counting close to 1.3 million UBI customers — mainly in Italy — insurance telematics is now entering the mainstream market, at least in certain countries,” said Dominique Bonte, VP and practice director for ABI Research. “The emergence of smartphone-based solutions, the gender ruling in the EU, and growing awareness of insurers to move to a more proactive, preventative and service/CRM-based approach improving the customer experience and loyalty will be strong drivers for growth in the near-to mid-term.”
The auto insurance industry faces a fundamental change to business, ABI said, with the emergence of fully autonomous cars, the movement toward a “zero accident risk environment” and active safety systems based on ADAS and V2X technology.
Traditional auto insurance revenues ultimately would decrease, ABI said, and expertise in automotive analytics and statistics could create opportunities in the “internet of things,” and big data skills would be much sought after. “[A]nother example of how technology will dramatically transform a traditional industry worth hundreds of billions of dollars,” ABI said.
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