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Automotive Insurance Telematics Outlook Europe And North · PDF file 2018-07-28 · 2 Agenda Telematics-based Insurance - Overview 3 Insurer UBI Strategy Comparative Analysis 4...

Jun 08, 2020




  • Automotive Insurance Telematics Outlook – Europe And North America

    May 2013

    Niranjan Manohar, Industry Analyst Frost  &  Sullivan’s  Automotive  &  Transportation

    Research Group

  • 2


    Telematics-based Insurance - Overview 3

    Insurer UBI Strategy Comparative Analysis 4

    Existing UBI Value Chain 6

    What's the Market Like – UBI Market Snapshot 7

    Regional Analysis of European UBI Market 8

    OEM’s  Involvement  in  UBI   9

    Examples of OEM Involvement in UBI 10

    Wireless Provider as UBI Solution Provider 12

    Expected Future UBI Value Chain 13

    Partner Ecosystem Highlights - Examples 14

    Conclusion 15

    Frost & Sullivan Contact Information 16

  • 3

    Telematics-based Insurance - Overview Driver behavior analysis is the key type of telematics-insurance solution OEMs, especially, are keenly looking into – reaching out to specific age buyers & keeping costs down

    PHYD+Miles = 2 Step Insurance Discount, current TREND

    Complete third party support for OEMs

    Ability to reach out to first-time buyers

    Rating algorithms key – real-time data

    Privacy  laws  don’t  affect  if  no  GPS

    PHYD Driver Behavior Mileage-based

    PAYD+Crash Management

    PAYD Combination of


    Telematics Insurance

    Single Step Flat Discount

    Single Step Multi-level Discount

    2 Step Multi- Level


    2 Step Discount+ Crash Analysis

  • 4

    Insurer UBI Strategy Comparative Analysis (North America & Europe) In most cases hardware is owned by the insurance company (sometimes rented by hardware provider to insurer), installation cost is non-existent


    Name of UBI Program Snapshot On-Board Advisor Insurethebox Coverbox

    Commercial Launch Date 2010 2010 2010 2009

    Type of UBI Miles, When & How Pay How You Drive Miles Miles, Where & When

    Current Geographic Presence 43 States 23 States UK Only

    UK & Northern Ireland

    Future Geographic Expansion

    AK, CA, HI, IN, NC, TN and WA

    Expansion to other states Pan Europe No expansion

    OEM / Aftermarket Fitment Aftermarket Aftermarket Aftermarket Aftermarket

    Discounts =15% Flat Discount Flat Discount

    Patent Issues NA NO NO NO

    Trial Periods Term Basis – 6 Months 2 Years None 14 Days

    Cancellation Fee None None $100-120 $30-160 (post 14 days)

    Source: Frost & Sullivan

  • 5

    Insurer UBI Strategy Comparative Analysis (North America & Europe) In addition to basic insurance features, insurance companies are packaging additional features, such as vehicle tracking and 911


    Stolen Vehicle Tracking

    eCall / 911

    Crash Management

    Fleet Management

    GPS Tracking

    UBI Target Users All ages

    Drivers of commercial fleets (Class 1 to 8) and Teens

    All ages  More useful to teens

    Experienced and young drivers (

  • 6

    Existing UBI Value Chain The current UBI market is controlled and driven by insurance companies with the services being leased/rented to TSP’s  of  the insured on policy contract basis

    Insurer Insured

    Telematics Service Provider (TSP)

    Web access with details about their

    driving if contract is with the TSP

    Self Installation of telematics hardware (for example device connects to the

    OBDII port – no professional installation)

    Installs the telematics hardware through an

    installer ( depending on insurance provider)

    Provides motor insurance cover based on UBI


    GSM Communication Operator Map Supplier Hardware Installer

    Billing Engine

    Database Management

    Assistance Operators

    Hardware Supplier

    Insurer  TSP: Pays monthly telematics

    package (dependent on basis of contract for

    all the services)

    TSP  Insured: UBI telematics solutions based on contract

    Shows the Business Value Chain when the TSP acts as the solutions provider when services are leased to them by insurance companies

    Shows the business value chain when the insurer becomes the solution provider while undertaking services from the TSPs on a contractual basis

  • 7












    2012 2013 2014 2015 2016 2017 2018 2019 2020

    U BI

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    UBI Subscribers NA UBI Subscribers EU

    What's the Market Like – UBI Market Snapshot (North America and Europe) With all the commercial UBI programs underway and as consumers become more aware of UBI benefits, installed base is expected to increase post 2016

    UBI Market Snapshot : Subscriber Base for UBI (Europe and North America) 2012 - 2020

    • Expected foray of newer UBI offerings from insurers along with OEMs (e.g. In North America StateFarm and Ford SYNC; Vauxhall and Ingenie) meeting wide fragmented regulatory needs.

    • Increase in UBI uptake expected from increased delivery of value proposition through media and agent channels explaining end user involvement and associated metrics

    Note: All figures are rounded; the base year is 2012. Source: Frost & Sullivan

  • 8

    Regional Analysis of European UBI Market – Subscriber Forecast Increasing expectations from the consumers side but OEMs realization of killer connected car components is slow and the business model is still weak









    2012 2020

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    2012 2020

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    2012 2020

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    0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0

    2012 2020

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    German market is expected to grow from ~ 50,000 in 2012 subscribers to

    ~ 2.7 Million by 2020

    France market is expected to grow from ~ 150,000 in 2012 subscribers

    to ~ 3.1 Million by 2020

    Italian market is expected to grow from ~ 1.5 Million in 2012

    subscribers to ~ 9.7 Million by 2020

    UK market is expected to grow from ~ 350,000 in 2012 subscribers to ~ 7.2

    Million by 2020

  • 9

    OEMs Involvement in UBI - Keen in Offering UBI Solutions OEMs are starting to embed the UBI functionality in their connected car device; Fiat, VW and Ford Europe are joining the race.

    OEM Insurance company TSP

    Direct Line Group


    Type of Solution

    Expected ?

  • 10

    Example of OEM Involvement in UBI – Citroen’s  Pure  PHYD  Program Teletrac’s platform is used to evaluate driving behavior, customers can get 12 months of free insurance as a trial based on driving analysis

     Citroën’s  C1  Connexion  Citroen and Teletrac will provide a free standard fit telematics based insurance solution 

     A free or discounted insurance is included in the price of the car. The driver will need to watch their safety scores which is provided to them everyday from Teletrac.

    Warnings are provided to drivers based on

    their driving pattern. If they receive more than 4 warnings throughout the year, the free or discounted insurances stand cancelled

    Highlights of Citroen  and  Teletrac’s  UBI  Policy

    Citroen’s  Involvement  in  UBI  

    Safety scores for individual vehicles based on speed, cornering, braking, and

    accelerating (how driven) is provided

    Drivers will have the ability to receive 12 months  of  free  insurance  on  Citroën’s  C1  

    Connexion insurance Policy

  • 11

    OEM Involvement in UBI – GM’s  pure  Mileage-based Insurance Utilizes OnStar telematics infrastructure to calculate premiums based on odometer readings with a max discount of 50%

     Odometer data collected from OnStar is sent back to State Farm approximately 30 days after the insured signs up for Drive Safe & Save

     The insured can receive a discount of up to 50% based on the distance they travel

    Highlights of State Farm Policy with OnStar

     The customer provides permission to use the odometer reading from his or her monthly OnStar Diagnostics report to be forwarded to GMAC Insurance

     The insurance discounts are based only on the miles driven

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