Insurance Telematics Subs to Grow from 1.85M in 2010 to 89M in 2017

The number of global insurance telematics users will grow at a CAGR of 90% from 1.85 million in 2010 to 89 million in 2017, according to a new forecast from ABI Research.

Dominique Bonte, group director, telematics and navigation, comments, “While insurance telematics or usage based insurance (UBI) is far from a recent phenomenon – US-based Progressive was already trialing solutions back in 2002 – a renewed interest in this market has occurred over the past two years, with an acceleration in uptake, as well as a dramatic change in the very nature of UBI, migrating from pay as you drive (PAYD) to pay how you drive (PHYD) based on continuous driver behavior monitoring and analysis.”

ABI Research nevertheless reminds that “many barriers hindering mass market uptake are still in place: self-selection of low risk drivers, privacy, lack of understanding of complex offers, lack of historical perspective validated by statistical data, absence of standards, installation of telematics hardware, and IP litigation.“

At the hardware level, the solutions are also likely to evolve in the future. “While currently the default UBI hardware solution consists of a dedicated device plugged into the vehicle’s diagnostics OBD port, future UBI hardware solutions will increasingly be based on either factory-installed technology (as in-car connectivity penetration rates increase) or – for the aftermarket – converged devices such as smartphones wirelessly connecting to the OBD bus via Bluetooth adapters.“