Telecom Lead America: The next evolution in telematics could be connected cars in the cloud, smart keys and telematics insurance, says the SBD report available from Global Information Inc, (GII).
More than 30 vehicle manufacturers have launched telematics services in the U.S, China, and Europe — an increase of 50 percent since 2010. Additionally 9 more vehicle manufacturers are planning to launch new services over the coming year. Over 19 million drivers are covered by telematics-impacted insurance policies; and over 15 percent of all new passenger cars in Europe are being smart-key fitted.
The growing availability of connected car services will gradually lead to a surge in fitment rates for in-car connectivity. SBD, in its recently released Ultimate Connected Car Guide forecasts that by 2015 over 30 million new cars will be fitted with some type of connectivity box.
But whilst there is a common industry-wide push towards enabling in-car connectivity, there are yet to be any major convergence in terms of technologies, business models or value chains. Although the opportunities to benefit from connectivity are rising, so are the risks associated with implementing the wrong strategy or falling behind competitors.
SBD forecast that by 2017 up to 19 million drivers worldwide will have an insurance policy that relies on some form of telematics being fitted to their cars. The market will be driven by insurers in the U.S and Europe who are particularly keen to search for new ways to manage risk and enhance their relationship with customers. Even within Europe, SBD forecasts that 75 percent of subscribers will come from just U.K and Italy, demonstrating the highly fragmented nature of the opportunities for telematics insurance.
Availability of smart key systems has doubled since 2010 in Europe, and the rise in split smart start and smart entry systems has helped increase fitment rates to over 15 percent on all new passenger cars. Customer awareness, availability and fitment of smart key technology have certainly never been higher, but customers are still demanding more from their systems. The challenge for OEMs and suppliers is to offer the best possible features to improve the overall customer experience, but without impacting vehicle security or incurring excessive cost, the report said.
Europe will have 44 million insurance telematics users in 2017 from 1.5 million in 2010
Recently ABI Research also predicated that Europe will have 44 million insurance telematics users in 2017 from 1.5 million in 2010. Insurance telematics markets in the U.K 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.