Europe will have 44 million insurance telematics users in 2017 from 1.5 million in 2010

Telecom Lead Europe: Europe will have 44 million
insurance telematics users in 2017 from 1.5 million in 2010.


Insurance telematics markets in the UK and Italy will drive
the significant growth.


Despite aggressive efforts from Progressive, North
America will continue to lag behind the European UBI market, according to ABI
Research.


While insurance telematics or usage based insurance
(UBI) is far from a recent phenomenon, renewed interest in this market has been
observed from both established players and new entrants with uptake
accelerating and the very nature of UBI changing dramatically from pay as you
drive (PAYD) to pay how you drive (PHYD) based on continuous driver behavior
monitoring and analysis,”¬Ě said Dominique Bonte, vice president and practice
director at ABI Research.


Pure UBI is integrated into a wider set of safety and
security connected car services. In Italy, stolen vehicle tracking was the
starting point for insurance telematics. This notion is spreading to driver
behavior monitoring feedback, including sharing and comparing scores on social
networks. Insurance telematics is absorbed in and being carried forward by the
emerging connected car boom.


While the deaveraged pricing model and fairness principle
of UBI to treat customers as individuals and have them pay for the risks they
are actually taking instead of premiums depending on inaccurate proxies such as
age and gender is gaining acceptance, it remains to be seen whether established
insurance companies will back a more open, transparent approach as it relates
to data collection and sharing which might slow down the uptake of UBI
considerably.


Future growth of UBI will be increasingly driven by smartphones
wirelessly connecting to the OBD bus via Bluetooth adapters.


The recent announcement from Ford and State Farm to
launch insurance telematics via SYNC vehicle health reports constitutes the de
facto start of phone-based UBI.


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