Report

Telematics in Insurance: Overview and Key Issues

/

October 2020 – This report examines the current state of telematics in personal auto insurance, including insurer activity, adoption rates, common program features, an overview of the provider market, and the design of telematics-based insurance products.

Telematics has emerged as a significant segment of the personal and commercial automotive and fleet insurance markets. Overall adoption is still relatively low across the industry, but insurers are having notable successes, some with penetration rates of 30-35%. Insurers have also begun to expand beyond retention discounts to create telematics-backed policies that emphasize rewards, customer engagement, and family safety. Telematics won’t dominate the industry in the near term, but it is here to stay. Insurers should consider telematics strategically, whether or not they ultimately elect to create telematics-based insurance offerings.

Key Points and Findings

  • Overall penetration is about 6-8% of insurers’ books, with some up to 35%. Telematics won’t become dominant in the near future, but some insurers are having substantial successes.
  • Value-added services and user experience are becoming more important. Telematics offerings are increasingly seen as customer-engagement opportunities—which requires that insurers support them appropriately.
  • Insurers should buy, not build, their telematics capabilities. The solution market is maturing, and insurers should leverage partners when developing their offerings or adding features.

Related Content

Canadian Wealth Managers’ Engagement With AI

Virtually every wealth management technology aligns in one way or another with GenAI.

Fixed Income and OTC Derivatives Trading, Q3 2023: Behind the Numbers (JP)

米国のクレジット市場は、パンデミック後にプライマリー・ディーラーがネット・ポジション縮小していることから、更なるプレッシャーを受けている。

Retail Banking & Payments Fintech Spotlight: Q4 2023

Meeting customers where they are is the key to winning market share in today’s environment.

Get Summary Report

"*" indicates required fields

Name*