The global insurance telematics market size is
expected to grow from US$857.2 million in 2015 to US$2.21 billion in
2020, at a compound annual growth rate (CAGR) of 20.9%, according to
a report by ReportLinker, a market research technology company based
in Lyon, France.
Telematics is a technology, in the taxonomy of the
Internet of Things, a phrase coined by Kevin Ashton in 1999 that has
gained currency in the past few years, telematics is in the topic
family of machine-to-machine (M2M) communication mechanisms. The
enabling technologies stem from telecommunication advances that have
reduced the cost of connecting associated but remote endpoints:
everything from smartphones to temperature sensors. The word
telematics implies a bidirectional exchange between endpoints for
sensing or measuring feedback or control.
Currently, telematics is the adopted terminology for
all technologies associated with communication for a motor vehicle,
from Google’s self-driving vehicles to aftermarket
location-reporting gadgets. Since the advent of the General Motors
OnStar program, there’s been an increasing penetration of
telematics capabilities and services in automobiles. Estimates put
expected penetration by 2017 at more than 70 percent for car
manufacturers’ new vehicles. Today’s telematics in insurance
usually refers to one-way collection of available information from a
vehicle.
The insurance telematics market has been segmented by type of
deployment, by end user, and by region. In terms of deployment type,
on-premises deployment is expected to dominate the market with
largest market size. In terms of end users, SMEs are estimated to
exhibit the highest growth rate as they are adopting cloud-based
insurance telematics solutions extensively.
Consumer’s enthusiasm for in-car connectivity and
growth of smartphone penetration in insurance and automobile sector
are among the factors driving the insurance telematics market. The
other factor driving the growth of the insurance telematics market is
the increase in regulatory compliances and regulations. Furthermore,
the market is expected to be driven by opportunities such as the
growth in IoT and increased demand for telematics solutions in
insurance and automotive sector.
In terms of regions, the insurance telematics market is segmented
into five major regional segments, namely, North America, APAC,
Europe, Latin America, and Middle East and Africa (MEA). Out of the
five major regions, APAC is likely to lead the market in terms of
market growth, followed by Latin America.
Whereas, North America will continue to have the
largest market share during the forecast period. However, the
increased need to introduce innovative insurance plans such as UBI,
PAYDAYS, and PHYD and induce control and visibility mechanisms has
led to a wider demand among insurance and automotive enterprises for
insurance telematics applications in the APAC region. The workforce
analytics market is driven by factors such as the need to address the
increasing challenges due to shrinking skilled workforce, the growing
Bring Your Own Device (BYOD) trend among organizations, and the
changing work dynamics.
Owing to the emergence of digital channels and
evolution of technological advancement in cloud and mobile business
operations, data infringement issues, and operational risks, large
enterprises are investing heavily in these solutions to simplify
their insurance process and sustain competitive advantage. Insurance
telematics cloud deployment is expected to grow with the highest rate
from 2015 to 2020.
However, on-premises deployment is expected to
contribute the largest market share during the forecast period. The
insurance telematics ecosystem consists of telematics service
providers. such as Octo Telematics, TomTom Telematics, and Trimble
Navigation; insurance companies such as Allstate Insurance and Aviva;
telematics technology providers such as Davis Instruments and Meta
Systems; automotive Original Equipment Manufacturers (OEMs) such as
General Motors.
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