According to a recent report by Research and Markets, the European market for insurance telematics policies reached 10.3 million in 2018. Growing at a compound annual growth rate (CAGR) of 36 percent, this number is expected to reach 47.9 million by 2023.
Usage-based insurance (or UBI) uses a special tracking device (usually placed within a client’s vehicle) to track driving behavior. The idea is that, by examining how a driver accelerates, brakes, and corners, an insurance company can determine a more appropriate premium for that client. Insurance companies who have adopted these programs also examine when a client drives and how much time they spend behind the wheel.
The recent report about UBI was produced by ABI Research, a New York-based market intelligence firm. ABI Research studied the adoption of usage-based (or Pay As You Drive) insurance programs in Europe and North America. It’s major finding: UBI is seriously catching on, especially across the pond.
ABI Research found that it’s in Italy and the United Kingdom where drivers are showing the most interest in usage-based insurance programs. But ABI Research found that there were a number of other countries, in both Europe and North America, where they see UBI program adoption increasing sharply in the coming years.
ABI says that a key factor in the increased use of UBI programs will involve the introduction of infotainment hardware and software that make it easier for insurance companies and their clients to access UBI features.
For example, as more and more vehicles are equipped with high-tech infotainment systems (like onboard touchscreen computers with smartphone connectivity), insurance companies can show drivers how their premiums are being calculated and how they can adjust their driving habits to save money. In any case, the ABI Research report suggests there’s a bright future ahead for insurance firms that adopt UBI (or PAYD) programs for their clients.