Global market for usage-based insurance grew by 32% in 2016 to 14 million policies: PTOLEMUS

The global market for usage-based insurance (UBI) insurance grew by 32% in 2016 to 14 million policies, according to PTOLEMUS Consulting Group’s UBI Quarterly Dashboard, released on Thursday.

The dashboard is a 100-page quarterly quantitative and business intelligence report surveying the global telematics insurance market. The assessment reveals that the global connected auto insurance market continued to grow rapidly in 2016 to 278 active programmes from 237 in 2015, PTOLEMUS said in a press release.

North America represents the biggest market to date with more than 7.1 million active policies. This compares to 6.5 million active policies in Europe and less than 0.4 million in the rest of the world. The dashboard covers Canada (less than 5% of the share of UBI policies by country), the United States, United Kingdom, Italy, France, Germany, Spain, Benelux, Russia, China and Australasia.

The following are “key connected auto insurance market trends” contained in the report:

• On the supply side, over two-thirds of UBI policy volumes worldwide are outsourced to so-called telematics service providers;
• An increased penetration of telematics in new insurance policies (up to one-third of new auto policies for the most advanced insurers);
• An increased variety of devices used by insurers, with the cigarette lighter adapter becoming a “credible alternative” to on-board diagnostic dongles in Europe;
• The rapid growth in new smartphone-enabled programmes, particularly in the U.S.;
• A still very slow take-up of OEM (original equipment manufacturer)-led programmes, which makes the aftermarket the “preferred route for insurance carriers to collect dynamic data”; and
• Burgeoning activity in a number of new regions, including Benelux, China, France and Germany.

PTOLEMUS Consulting Group is a strategy consulting firm entirely focused on location-based services and telematics.