The rise of telematics presents a number of competitive challenges to auto insurers, including premium and profit erosion, threats to their business models, privacy concerns and regulatory considerations, but also a path to differentiation in a market that has been primarily price-driven, according to “Telematics: Driving the automobile insurance market through disruption,” a new white paper from Deloitte.

U.S.-based insurers have been slow to embrace the technology for a variety of reasons. In addition to those above, for example, Progressive, an undeniable market leader, has been aggressive in asserting patents claims. The technology is used by just 2 million drivers in the United States, who have agreed to use it in exchange for discounts, but 44 million users in Europe are projected by 2017, according to ABI Research’s study, “Insurance Telematics.”

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