Auto Tech Report - Usage Based Insurance (UBI) - 2016

Usage-based insurance (UBI), also known as insurance telematics, is a result of the technological revolution that is increasingly being called the Internet of Things (IoT). The picture of the insurance telematics ecosystem that has emerged from conversations with more than 40 industry executives is of a landscape in transition and robust expansion.

Delivery will comprise of the report and an excel spreadsheet of UBI forecasts by region, with projections from 2015 to 2023.

About the Methodology:

The IHS Usage Based Insurance Report is based on more than 40 interviews from across the value chain, from insurance carriers, data aggregators, telecommunications companies, to automotive OEMs. More than 70 companies are mentioned throughout the report as it offers a comprehensive review of the business models, barriers to uptake, market drivers, case studies, pilot programs, value propositions and device debates.

The forecast section is regional and country level, based on IHS Automotive forecasts which include Passenger Cars (PC) as well as Light Commercial Vehicles (LCV). UBI attach rates as the share of autos in-use with UBI-based insurance policies, as well as UBI subscriber numbers and UBI growth rates are provided.

Contents

Executive summary

UBI today: An ongoing experiment

• What it is
• Business models
• Where UBI is today

Barriers to uptake

• Concerns about sharing personal data
• The hardware
• The wrong value proposition
• Consumer misunderstanding of UBI
• Cultural and legal differences
• Insurer reluctance

Market drivers

• The smartphone
• Case Study: State Farm® Insurance
• Millennials
• Big Data
• End-to-end data aggregators
• MNOs and others in the UBI space
• The connected car
• Case Study: General Motors and OnStar

Value propositions

• The discount
• Customer engagement
• Value-added services
• Safety as a value
• Claims management

The device debate

• The black box
• The OBD-II dongle
• The smartphone

Advantages

• Customer engagement
• Detecting driver distraction

Disadvantages

• Identifying the trip
• The data, the battery, the cost of the data plan
• The hybrid solution
• The connected car

Markets and forecasts

• North America
• Europe
• Europe forecast
• Case Study: The First on the Market
• China
• China forecast
• Other markets
• Forecast summary

The future of UBI

• Millennials
• Pay-per-mile and pay-per-ride insurance
• UBI and ambient data
• The UBI insurance panel
• Predictive risk assessment
• UBI and ADAS (Advanced Driver Assistance Systems)
• UBI and the autonomous car

Appendix I: Companies mentioned

Appendix II: Contributors