Global use of telematic technology and methods will skyrocket by 2020.
According to a report by PTOLEMUS Consulting Group, an international strategy consulting firm, usage based insurance is going to change the way that auto insurers and their policyholders do business together.
The report is being applauded as the most comprehensive ever created on insurance telematics.
The strategic report was 400 pages long and is expected to become the document used by the industry as a standard reference, as it provides vital data regarding the global landscape for auto coverage, and the new usage based insurance technologies, as well as the difference they are making in the economics of the marketplace, and in insurer response strategies.
The abstract of the study, 60 pages in length, is available for free from the official PTOLEMUS website.
The report estimates that the market for pay as you drive (PAYD) coverage has already reached more than 2 million customers, and that it is now sitting at its tipping point. It predicts that by the end of this decade, it will be fifty times larger than it is today, and that policies based on telematics will be bringing in an annual €50 billion to insurers who are taking advantage of the technology.
Consumers are also pleased to hear this news, as safer and lower mileage drivers will no longer be paying higher premiums in order to cover the costs of the road warriors, fraudulent claimants, and dangerous drivers. They are already saving up to 20 or even 50 percent on the premiums they pay every month.
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The managing director of PTOLEMUS, Frederic Bruneteau, spoke about the difference it will make for insurers by saying that “The Internet is revolutionising all sectors and this is now the turn of the auto insurance industry. By enabling insurers to build their pricing based on the actual, real-time behaviour of drivers, PAYD redefines entirely the way to charge for motor risks. Underwriters must adapt to the new connected way of doing business.”
Even Moody’s has released the recommendation that underwriters adopt usage based insurance “sooner than later”, as it has already started to take its first steps in the U.S. and the U.K.