Demand for telematics technology has reached a new high in many parts of the world
A new report released by Timetric shows that the insurance telematics market is set to see strong growth in the coming years. The demand for telematics technology within the insurance industry has been on the rise for some time, particularly among auto insurance companies. This technology is used to track consumer information and is becoming a valuable tool for auto insurers looking to offer new products to drivers. Telematics has lead to the creation of usage-based insurance policies, which have become quite popular among consumers.
Usage-based policies are popular among consumers because of the discounts they offer
Usage-based policies provide people with the same coverage that conventional auto insurance policies do, but are often less expensive. Drivers pay for these policies only when they use them and telematics technology is used to determine when a policyholder is driving. The demand for telematics is expected to see significant growth through 2018, according to the report. The report notes that the availability of telematics-based policies increased by 4% by the end of 2013.
Sale of usage-based policies is expected to grow by 80% through 2018
Global sales of telematics-based policies are expected to see a compound annual growth rate of 80% from 2013 to 2018. This growth is expected to be powered by the rapid adoption of usage-based auto insurance policies in the United States, United Kingdom, and Italy. Value-added services may help further the popularity of usage-based policies, but the discounts that these policies offer are likely to be the most favored aspect among consumers.
Governments are beginning to support the adoption of telematics within the transportation space
Italy is currently home to the most mature usage-based auto insurance market in the world. In some countries, new legislation is mandating the use of telematics technology, which is adding more momentum to the growth of the usage-based insurance market. Several automakers are also releasing vehicles equipped with telematics, allowing for faster growth within this market. In the coming years, usage-based policies may become the new normal for the auto insurance sector.