The usage of telematics in the auto insurance industry is soaring, with one report claiming that nearly 50% of the world’s vehicles will be insured with usage-based policies by 2030. The same report, from Ptolemus Consulting Group, predicts that the industry will grow to nearly 100 million policies worldwide in the next three years.
Today,
Octo Telematics revealed that it has hit the milestone of five million cars connected to its platform worldwide – an increase of 25% since last year, which the firm says gives it 39% of the market for active UBI policies.
Andrew Lee, the firm’s head of market intelligence and analysis, said that the milestone was not just significant for Octo but for the entire connected insurance industry. “What this really demonstrates is that there’s a real appreciation for this type of policy,” he explained.
Formerly the domain of younger, almost uninsurable drivers, telematics is growing in popularity and has moved away from being a type of insurance that is forced on to people, Lee said.
Particularly for more mature drivers, whose premiums tend to be more reasonable thanks to years of driving experience and no-claims bonuses, the added services that come with telematics – such as support in breakdown recovery – are increasingly a draw.
Insurers continue to benefit too, as telematics can help keep their conversation with the customer be a positive one, Lee said, from being able to offer feedback on good driving, to using the technology to offer discounts and giveaways.
The data collected by telematics can also speed up the claims process.
“Think about the claims process and how long that process can potentially take,” Lee commented. “Telematics can very quickly identify how the accident occurred, so if there’s any dispute in liability between you and the other party, the insurer has more data on what actually happened to support you.”
With data such as the vehicle make, model, and level of damage, insurers can automatically process repairs bookings – meaning administrative time is reduced.
While just a couple of years ago, the topic of privacy concerns and the so-called “Big Brother” effect was dominant, Lee said that both customer and insurer have come around to the concept now.
“In all honesty, it’s not even a conversation anymore, because the value proposition of what connected insurance can offer is now fully realised, not only by insurers that have adopted these types of product offerings and programs, but actually by consumers themselves now.”
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