North America Insurance Telematics Market Size
| Study Period | 2018 - 2028 |
| Base Year For Estimation | 2022 |
| Market Size (2023) | USD 1.79 Billion |
| Market Size (2028) | USD 4.22 Billion |
| CAGR (2023 - 2028) | 18.75 % |
| Market Concentration | Low |
Major Players
*Disclaimer: Major Players sorted in no particular order |
Need a report that reflects how COVID-19 has impacted this market and its growth?
North America Insurance Telematics Market Analysis
The North America Insurance Telematics Market size is estimated at USD 1.79 billion in 2023, and is expected to reach USD 4.22 billion by 2028, growing at a CAGR of 18.75% during the forecast period (2023-2028).
The rising trend of user-based insurance (UBI) policies and the growing adoption of smart technologies in the insurance industry for claiming and estimating premiums are major factors driving the adoption of telematics solutions across the region. Insurance companies mainly use telematics solutions to assess risk and calculate renewal premium costs. The integration of telematics technology also drives the latest revolution in the automotive insurance industry.
- By enabling the combination of the properties and capabilities of telecommunication and information technology, telematics is now being used across various industries for effective transportation and logistics purposes. Recently, the focus of the application has shifted from vehicle location and routing to solutions focused on drivers and their safety. Telematics data for the vehicle's real-time movements at the time of the accident and similar cases in the past are fed into an algorithm and then combined with traditional inspection tools to help validate claims.
- Self-installed OBD devices and smartphone-based insurance telematics remain the primary drivers of the market. Smartphone apps, like Zendrive, play a significant role in driving the telematics revolution. By monitoring driving behavior, vehicle health, and maintenance intervals, telematics solutions help minimize accidents, the number of speeding tickets, and downtime.
- Usage-based insurance (UBI) is widely available for vehicles in the North American region, a driving factor for the insurance telematics market. In this UBI, the payable premium for the policy is directly linked with the insured product or service usage. For consumers, it is expected to promote safe driving, resulting in the mitigation of accident severity and frequency.
- Many automobile industry firms have invested in advanced telematics systems to gain a competitive edge. Fleet managers can obtain a wealth of information about the condition of their cars from application-specific telematics and computer imaging. However, issues with data quality and compatibility brought about by internal and external damage, installation time, and frequent updates may place a cap on the market.
- The COVID-19 pandemic positively impacted the insurance telematics business, as insurance telematics could respond directly to consumer needs for cheaper premiums when vehicles were used less frequently during the lockdown. Telematics has also improved accurate calculations and discounts on auto insurance policies, allowing consumers to pay more fair premiums and insurance firms to be more precise. As a result, the demand for insurance telematics increased drastically during the global health crisis.
North America Insurance Telematics Market Trends
Adoption of Usage-based Insurance by Insurance Companies is Expected to Drive the Market Growth
- The first UBI initiatives appeared in the United States over a decade ago when Progressive Insurance Company and General Motors Assurance Company (GMAC) coupled GPS technology and cellular systems to give mileage-linked discounts. Roadside assistance and vehicle theft recovery were (and still are) frequently bundled with these savings. Recent technological advancements have boosted the efficiency and cost of telematics, allowing insurers to track how many miles people drive and how and when they drive. As a result, numerous UBI variants, such as Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), Pay-As-You-Go, and Distance-Based insurance, have grown in popularity.
- Usage-based insurance (or UBI) uses a special tracking device (usually placed within a client's vehicle) to track driving behavior. By examining how a driver accelerates, brakes, and corners, the idea is that the insurance company can determine a more appropriate premium for that client. Insurance companies that have adopted these programs also examine when a client drives and how much time they spend behind the wheel.
- In the coming years, the expansion of the vehicle industry is likely to move the usage-based insurance market forward. The automotive industry comprises many firms and organizations involved in automobile design, production, marketing, and sale. Telematics-driven usage-based insurance appeals to car owners since it offers low premiums for low-risk driving and high premiums for high-risk driving. As a result, individuals can significantly reduce their insurance prices by changing their driving behaviors.
- Light-duty vehicles (LDV) and heavy-duty vehicles (HDV) are the two most common vehicle classes for usage-based insurance (UBI). Passenger automobiles with a maximum gross vehicle weight of fewer than 8500 lbs are classified as light-duty vehicles, whereas heavy-duty vehicles have a higher gross vehicle weight. OBD-II-based UBI programs, smartphone-based UBI programs, hybrid-based UBI programs, and black-box-based UBI programs are among the several technologies that are utilized in various sorts of packages such as pay-as-you-drive (PAYD), pay-how-you-drive (PHYD), and manage-how-you-drive (MWYD). According to BEA, the US auto industry was expected to sell approximately 13.75 million light vehicle units in 2022. This figure comprises about 2.9 million passenger cars and just under 10.9 million light trucks delivered at retail.
- According to a US auto insurance study conducted between January and April 2022, usage-based automobile insurance programs saw a dramatic increase that could save up to 30% on the insurance premium, depending on the operator or provider. However, the most significant fall in customer satisfaction is due to price increases. This negative satisfaction can be decreased by proactively informing customers ahead of time if the price increases.
To understand key trends, Download Sample Report
United States is Expected to Hold Significant Market Share
- Decreasing the cost of development and technology, altering consumer behavior, and stringent government regulations drive the growth of the market studied in the country. In the United States, consumers prefer usage-based insurance (UBI) snapshot programs. In other regions, motor insurance telematics policies are preferred.
- The introduction of insurance telematics has several advantages for insurers and consumers, which are expected to fuel market growth. For consumers, it will promote safe driving, resulting in the mitigation of accident severity and frequency. Over the forecast period, the insurers' claim-handling expenses will likely decrease by at least half, contributing to the market's growth.
- The growing adoption of insurance telematics can help reduce various problems. For instance, in the United States, the Institute for Operations Research and the Management Sciences (INFORMS) examined the database of a major US automobile insurance company and found that the drivers who enrolled in usage-based insurance programs decreased hard brakes by 21% after six months.
- Various US consumers are switching insurers because their premiums increased despite driving less. Lockdown measures during the pandemic led consumers to drive less, laying bare the inflexibility of traditional coverage that doesn't typically adapt its premiums to changing habits. This pushed more policyholders to demand behavior-based pricing. It can offer lower premiums by analyzing auto usage and behavioral data to personalize mileage-based policies.
- According to Lloyd's of London, the value of the motor vehicle insurance sector in the United States is expected to amount to approximately USD 224.7 billion in 2015. It was projected to grow to about USD 358.51 billion by 2025.
To understand geography trends, Download Sample Report
North America Insurance Telematics Industry Overview
The North American insurance telematics market is fragmented, with the presence of major players like Towergate Insurance, Unipolsai Assicurazioni SpA, Octo Telematics SpA, Drive Quant, and IMETRIK Global Inc. Players in the market are adopting strategies such as partnerships and acquisitions to enhance their product offerings and gain a sustainable competitive advantage.
In February 2023, OCTO Telematics announced a new partnership with Ford Motor Company to expand its European data streaming business. This deal builds on an earlier agreement signed in the North American market in July last year. OCTO strengthened its market-proven telematics services in insurance and analytics by exploiting Ford's connected car data.
In October 2022, Driven Telematics, a company that helps families with their auto insurance rates, partnered with Cambridge Mobile Telematics (CMT) to help teen drivers improve their driving safety and save on auto insurance. The new free Driven app gives families insights into their driving behaviors and gives them a driving score to shop for insurers to keep rates low.
North America Insurance Telematics Market Leaders
Towergate Insurance
Unipolsai Assicurazioni SpA
Octo Telematics SpA
Drive Quant
IMERTIK Global Inc.
*Disclaimer: Major Players sorted in no particular order
North America Insurance Telematics Market News
- November 2022: CerebrumX Lab Inc. (CerebrumX), an AI-driven automotive data services and management platform, announced that it would use Ford-connected car data to enhance its data-driven UBI as-a-Service model for insurers. This concept allowed for a faster and more cost-effective introduction of UBI schemes by utilizing integrated telematics in qualifying Ford and Lincoln-connected vehicles. CerebrumX's unique AI-based platform, which has access to more than 15 million vehicles and 800 million miles of driving data, is speeding the pace of change in the automotive sector toward a more sustainable and safer society. It collaborates with insurers, actuaries, and regulatory agencies around North America to establish data-driven UBI schemes that benefit the end user.
- September 2022: Cambridge Mobile Telematics (CMT), one of the largest global telematics service providers, announced DriveWell Crash & Claims, the most advanced telematics solution for auto insurance claims. The highly anticipated efficiency and effectiveness that telematics brings to claims is now a reality. Before telematics crash data, insurers had to wait for customers to call before reacting to a claim, manually collecting information and entering it into their systems. With DriveWell Crash & Claims, insurers can offer proactive, real-time services to their customers, providing peace of mind and life-saving help. Telematics crash data helps insurers create a streamlined customer claims experience after a traumatic event.
- June 2022: IMS, one of the leading global vehicle and driving data providers, partnered with Aviva Canada to launch Aviva Journey, a new app-based telematics solution for the Canadian auto insurance market. Aviva Canada uses IMS One App mobile telematics technology to acquire data insights and provide meaningful interaction with its policyholders via the Aviva Journey app.
North America Insurance Telematics Market Report - Table of Contents
1. INTRODUCTION
1.1 Study Assumptions and Market Definition
1.2 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHT
4.1 Market Overview
4.2 Industry Attractiveness - Porter's Five Forces Analysis
4.2.1 Bargaining Power of Buyers/Consumers
4.2.2 Bargaining Power of Suppliers
4.2.3 Threat of New Entrants
4.2.4 Threat of Substitute Products
4.2.5 Intensity of Competitive Rivalry
4.3 Industry Value Chain Analysis
4.4 Impact of COVID-19 on the Industry
5. MARKET DYNAMICS
5.1 Market Drivers
5.1.1 Increasing Adoption of Usage-based Insurance by Insurance Companies
5.2 Market Challenge
5.2.1 Data Quality and Compatibility Issues
6. USAGE BASED INSURANCE TELEMATICS - REVENUE MODELS
6.1 Pay-as-you-drive
6.2 Pay-how-you-drive
6.3 Manage-how-you-drive
7. COMPARATIVE ANALYSIS OF VARIOUS TYPES OF TELEMATICS HARDWARE BASED INSURANCE SOLUTIONS
7.1 Portable
7.2 Embedded
7.3 Smartphone Based
8. MARKET SEGMENTATION
8.1 By Country
8.1.1 United States
8.1.2 Canada
9. COMPETITIVE INTELLIGENCE
9.1 Towergate Insurance
9.2 Unipolsai Assicurazioni SpA
9.3 Octo Telematics SpA
9.4 Drive Quant
9.5 IMERTIK Global Inc.
9.6 AXA SA
9.7 The Floow Limited
9.8 LexisNexis Risks Solutions
9.9 Vodafone Automotive SpA
9.10 Viasat Group
9.11 Cambridge Mobile Telematics
9.12 AllState Insurance Co.
9.13 State Farm Mutual Automobile Insurance Company
9.14 Allianz PLC
10. INVESTMENT ANALYSIS
11. FUTURE OF THE MARKET
North America Insurance Telematics Industry Segmentation
Telematics insurance is a type of motor insurance that takes advantage of devices such as smartphone apps, cigarette-lighter plugs, smart tags, and onboard diagnostic devices. Telematics denotes a bidirectional exchange between endpoints for sensing, computing feedback, or control. It is an accepted term for all technologies related to communication for a motor vehicle, from Google's self-driving vehicles to the aftermarket location-reporting devices.
North America's insurance telematics market is segmented by country (United States, Canada). The market sizes and forecasts are provided in terms of value in USD for all the above segments.
| By Country | |
| United States | |
| Canada |
North America Insurance Telematics Market Research FAQs
How big is the North America Insurance Telematics Market?
The North America Insurance Telematics Market size is expected to reach USD 1.79 billion in 2023 and grow at a CAGR of 18.75% to reach USD 4.22 billion by 2028.
What is the current North America Insurance Telematics Market size?
In 2023, the North America Insurance Telematics Market size is expected to reach USD 1.79 billion.
Who are the key players in North America Insurance Telematics Market?
Towergate Insurance, Unipolsai Assicurazioni SpA, Octo Telematics SpA, Drive Quant and IMERTIK Global Inc. are the major companies operating in the North America Insurance Telematics Market.
North America Insurance Telematics Industry Report
Statistics for the 2023 North America Insurance Telematics market share, size and revenue growth rate, created by Mordor Intelligenceā¢ Industry Reports. North America Insurance Telematics analysis includes a market forecast outlook to for 2023 to 2028 and historical overview. Get a sample of this industry analysis as a free report PDF download.
North America Insurance Telematics Market Report Snapshots
