Visiongain Forecasts 21.7M UBI Policyholders in 2015: Really?

Market research firm Visiongain in a new report forecasts that “the global market for automotive usage-based insurance (UBI) will account for 21.7 million policyholders in 2015, a significant increase over the 12.2 million policyholders accounted for in 2014.“

The company also forecast that “over $60 billion of automotive premiums will be generated by the Usage-Based Insurance market by 2020.“

But these numbers seems to be quite overestimated. Last May Berg Insight published a report that estimated the market at 9 million policyholders across Europe and North America. That number was already a bit optimistic.

Clearly the United States and Italy are the only two markets were UBI has found a real success thus far.

In a recent opinion paper about UBI (read here) Ptolemus Consulting estimated that the penetration was 10.59 percent in Italy and 2.59 percent in the United States

The British market, that was long talked about, is under 350,000 policy holders and its growth has stalled at that level. The rest of the world is very much nascent.

In a recent report LexisNexis pointed out that fact that the current wave of UBI programs was not sustainable (read more here).

“Historically in the U.S., usage-based insurance has been defined as a program to reward good driving behavior with discounted insurance premiums, however, offering a premium discount is becoming less attractive to drivers and less sustainable to insurers,” explained David Lukens, Director, Telematics, LexisNexis Risk Solutions.

Monday, October 12th 2015

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