US Automotive Usage-Based Insurance (UBI) Growth Opportunities

Usage-Based Insurance is fast becoming a revolution in the United States as it offers a package of benefits such as Attracting low-risk drivers. Enhancing customer loyalty. Reducing claims costs. Increasing the number of potential touch-points per year which is altering the face of the Auto-Insurance Industry and is poised to grow at a CAGR of 21.2% to reach a Market Value of US$ 30.91 Bn in the year 2025.

Definition / Scope
Market Overview
Market Risks
Top Market Opportunities
Market Drivers
Market Restraints
Industry Challenges
Technology Trends
Pricing Trends
Post COVID-19 Recovery
Market Size and Forecast
Market Outlook
Technology Roadmap
Distribution Chain Analysis
Competitive Landscape
Competitive Factors
Key Market Players
Strategic Conclusion
References
Further Reading
Appendix

Definition / Scope

Usage-Based Insurance (UBI) is a type of auto insurance that keeps track of the users driving habits and mileage. UBI is frequently powered by in-vehicle telecommunication devices (telematics)-technology that can be self-installed via a plug-in device or that is already integrated in original equipment installed by car manufacturers. It may also be accessed via mobile applications. The primary premise behind UBI is that a driver’s behavior is directly observed while he or she is driving, allowing insurers to better align driving behaviors with premium rates.

Various Types of Usage-Based Car Insurance

Pay as You Drive (PAYD)

In the case of Pay as You Drive insurance, the premium is calculated based on the amount of driving done.

Pay How You Drive (PHYD)

In the Pay How You Drive model, the car insurance premium is calculated depending on driving skills such as acceleration, braking, and so on.

Pay as You Go (PAYG)

The Pay as You Go car insurance concept necessitates the installation of a Telematics device and can include any of the criteria such as data collected from the vehicle, including speed and time-of-day information, historic riskiness of the road, driving actions in addition to distance or time travelled.

Distance-based Insurance

Pay Per Mile auto insurance is dependent on how many miles the vehicle travels during the coverage period.

Market Overview

The Usage Based Insurance in the U.S. Market is estimated at US$ 9.8 Billion in 2020, and is poised to grow at a CAGR of 21.2% to reach a Market Size of US$ 30.91 Billion in 2026.

Amongst package type, Pay-How-You-Drive (PHYD) segment holds the Dominant position

The market is divided into three types of packages: Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), and Manage-How-You-Drive (MHYD). Due to rising consumer preference for comfort and luxury, as well as increased competition among OEMs to offer such driver assistance systems, Pay-How-You-Drive (PHYD) dominated the market with a share of 69.9% in 2020 and is likely to maintain its dominance during the projection period.

Amongst technology type, On-Board Diagnostics (OBD) is expected to hold major market share

The market is divided into On-Board Diagnostics (OBD), smartphone, black box, and embedded telematics segments based on technology type. On-Board Diagnostics (OBD) accounted for 49.9% of the market revenue in 2020. Due to value-added services such as maintenance reminders, roadside assistance, and crash warnings, On-Board Diagnostics now dominates the Automotive Usage-Based Insurance market and is predicted to do so during the examined period. Telematics devices for OBD systems are specifically developed for that platform, collecting unbiased data across all demographics and vehicle types.

Amongst vehicle type, passenger vehicles are expected to dominate the market during the forecast period

The market is divided into two segments based on vehicle type: passenger vehicles and commercial vehicles. Passenger cars held the largest market share of 82.7 percent in 2019 and are likely to continue to be the leading segment of the Automotive Usage-Based Insurance market throughout the forecast period. Before the introduction of “black boxes” or computers in many popular passenger car models, the speed and braking of the vehicles were established by accident reconstruction professionals who gathered evidence about the collision to form an opinion about the cars’ speed. The speed of passenger cars equipped with data recorders is no longer a point of contention.

Market Risks

The Major Risks posing as threat to the growth of the US Automotive Usage-Based Insurance Market include:

Credit Risk

Credit risk is an unavoidable part of lending and investing. Reinsurers, brokers, agents, and clients can all contribute to the problem. Payment default or a decline in credit quality are both examples of credit risk. Investing in a single industry, economic sector, counterparty, or geographic location is dangerous in general.

Excessive exposure to group corporations can result in credit risk. Credit risk can arise from a rudimentary grasp of the complexity and potential risks of complicated derivative arrangements.

Liquidity Risk

Liquidity risk in UBI arises from the surrender of a significant number of policies, while liquidity risk in general insurance arises from policy non-renewal and/or large claims.

Liquidity risk can result in asset value loss due to forced asset sales, especially if the market is in a depression. Although a loan might be raised instead of selling assets to satisfy cash needs, the constraint could be a lack of loan availability or loan availability at a high cost. A single or a few parties holding a significant portion of a business with significant value can put the insurer’s liquidity at risk.

Top Market Opportunities

The top opportunities for new-entrants in the US Automotive Usage-Based Insurance Market are

Connected-Cars

Insurance companies are showcasing new ways to benefit from connected-car networks. Vehicle manufacturers, telecom companies, insurance companies, digital platform behemoths like Amazon and Uber, and sensor and chip manufacturers were all part of a robust linked auto ecosystem. Furthermore, the ecosystem’s growth is altering the competitive landscape for companies in the usage-based insurance business.

Furthermore, the introduction of predictive modelling or AI technology has enabled real-time data streaming from linked automobiles, which will change the structure of the usage-based insurance sector while also supporting its ascension to new horizons.

Big Data

The internet and smartphones have altered the way consumers buy insurance today. The insurance environment has become straightforward, convenient, and easy thanks to technological advancements. The focus now is on moving from generalization to personalization, which will be accomplished through telematics or usage-based car insurance. UBI is the most common application of big data adaption in the insurance business.

The market has grown substantially in recent years, particularly in the United States and Europe. UBI products can provide exact risk segmentation and improve the insurance company’s service quality by monitoring real driving behavior. UBI products can also deliver a number of value-added services such as risk-based premium, voluntary car-telematics systems and e-assistance systems in case of accidents.

Market Drivers

The Key factors driving the growth of the in US Automotive Usage-Based Insurance Market are

Surging adoption of telematics and connected cars

Telematics is quickly becoming a part of the automotive mainstream. Through usage-based insurance, car telematics helps improve driving behavior, road safety, and align insurance premiums (UBI). The telematics market is expected to reach USD 750 billion by 2030, according to the GSMA (Global System for Mobile Communications).

The expansion of the telematics sector can be attributed to two key factors. First, governments are increasingly willing to impose telematics services such as emergency-call capability, as is already the case in the United States.

Second, there is a growing demand for automobiles with more connectivity and intelligence. According to a LexisNexis Risk Solutions whitepaper, telematics-enabled policies were purchased by 80–90% of auto insurance buyers in 2017. According to IMS (Intelligent Mechatronic Systems), the automotive telematics market is predicted to increase at a CAGR of 23–24 percent over the next few years, thanks to improved government regulations and technology penetration. In addition, as the demand for connected automobile services grows, insurance providers will be able to assist clients in the event of an emergency, resulting in time savings and claim process efficiency. As a result, the growing acceptance of connected car services will have a significant impact on the market for automobile usage-based insurance.

Ubiquitous Features offered by UBI (Usage Based Insurance)

Consumers can pay a premium depending on their driving habits and miles driven with usage-based insurance. Usage-based insurance features such as fraud detection, pricing accuracy, stolen vehicle recovery, automated claims administration, and reduced or eliminated towing rates help these businesses. The data gathered is used to provide clients with value-added services while also minimizing claims leakage and operating costs. As a result, usage-based insurance for automobiles benefits both customers and insurers, which is projected to fuel market expansion.

Expansion of the automobile industry

In the next years, the expansion of the vehicle industry is predicted to fuel the growth of the usage-based insurance market. The automotive industry is made up of a wide range of firms and organizations involved in the design, production, marketing, and sale of automobiles. 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.

The global automotive sector is predicted to increase quickly in 2021, according to the Economist Intelligence Unit (The EIU), with new car sales increasing by 15% and commercial vehicle sales increasing by 16%. Electric vehicle sales are predicted to rise from 1.1 million in 2020 to 1.6 million in 2021, according to projections. As a result, the growth of the vehicle sector propels the usage-based insurance market forward.

Rising competition between insurance firms to quote competitive prices

The UBI market is driven by growing competition among insurance companies to quote competitive costs and properly underwrite insurance. Effective vehicle monitoring allows insurance firms to effectively assess risk and, as a result, determine compensation and preserve the actuarial reserve. The rise in consumer interest in linked automobiles has resulted in an increase in insurance usage. Insurance companies are offered additional services such as vehicle diagnostics, theft tracking, and breakdown warning, all of which help to prevent possible fraud and increase business profitability.

Premium rate reductions for drivers who drive responsibly are encouraged, increasing the UBI market. Because consumption-based insurance lowers insurer and insured prices, UBI demand is likely to rise over the forecast period.

Market Restraints

The Primary Factors hindering the growth of the US Automotive Usage-Based Insurance Market are

Ambiguity over regulations and legislative environments

Each state in the United States has its own set of laws and regulations governing automobile usage-based insurance. While Illinois has restrictions for pay-as-you-drive (PAYD) plans, it lacks specific standards for pay-how-you-drive (PWD) plans (PHYD). In the United States, dealing with multiple sets of rules makes the process of car usage-based insurance more difficult. Furthermore, varying insurance requirements in different states present operational challenges for cross-state fleets.

For instance, Illinois compels carriers to disclose their underwriting models, whereas California restricts product pricing constraints. Insurance businesses are forced to create innovative goods and services that comply with regional rules due to inconsistent requirements. As a result, businesses must diversify their product portfolios. The regulatory structure encourages lower premiums for excellent driving behavior in car usage-based insurance. As a result, ambiguities in legislation and legislative contexts may limit the expansion of the car usage-based insurance industry.

Need for interoperability of different industries

UBI is a complicated insurance concept that necessitates the collaboration of several businesses such as insurance, IT, telecommunications, and hardware. Legal difficulties and considerable IT infrastructure development are among the market’s challenges. Many people are unsure whether or not their personal information is shared. Maintaining data privacy is a major concern for UBI suppliers.

Industry Challenges

The major challenges faced by the Players in the US Automotive Usage-Based Insurance Market are

Developing automotive usage-based insurance ecosystem

As the demand for usage-based automobile insurance continues to grow, a strong ecosystem is emerging around connected car services. Automobile IoT and insurance platform providers, data platform and analytics firms, automotive insurance black box and telematics providers, big data companies, and cloud service providers are all part of this ecosystem. Insurers are undergoing a digital transition in a number of areas. Predictive modelling or machine learning technology, for example, may supplant insurance firms’ analytical capabilities.

Furthermore, real-time data collection from automobiles is increasingly replacing traditional data sets comprising risk profiles based on claims history. For stakeholders in the usage-based insurance business, the rise of vehicle telematics, demand for linked car services, and mobile-based telematics will provide enormous opportunities.

Data Privacy and integrity Challenges

Data privacy and theft, as well as a lack of openness in data collecting tactics, are expected to stymie market expansion. In addition, inadequate internet access may alter the results of real-time monitoring systems, influencing the premium savings granted by insurance providers. Furthermore, obstacles such as a lack of personal integrity and design intricacy may stifle market expansion.

Technology Trends

Technology is the fuel that drives the growth of the Insurtech Market in USA and the emergence of Disruptive technologies has significantly influenced the growth of the UBI Market in USA, some of the key technologies shaping the emergence of Automotive UBI Market in USA are

Blockchain Data

Although blockchain is still in its infancy as an insurance technology, insurers would be well to be ahead of the curve. Experts believe its impact will be seen in:Increased efficiency

Consumer trust
Enhanced efficiencies
Improved claims processing
Fraud detection and prevention

According to a recent PwC research, blockchain presents a $5 billion opportunity for P&C insurance. For a sector that relies on large amounts of secure data, blockchain technology has the potential to “transform business transactions and information sharing on one hand, while removing costly layers of overhead dedicated to verification on the other.

Artificial Intelligence (AI)

Artificial intelligence (AI) has grown in popularity in recent years, with AI-enabled products becoming prevalent in households all over the world. According to a Deloitte Digital research, more than 35.6 million people in the United States use voice-activated AI assistants as of 2017, and the global investment on these technologies is expected to exceed $47 billion by 2020.

Consumers expect individualized experiences, especially when purchasing something as crucial as property and casualty insurance. AI allows insurers to build these one-of-a-kind experiences while still fulfilling the high-speed demands of current consumers. The idea is to employ AI’s skills to tap into the vast volumes of consumer data accessible to build personalized experiences based on a person’s preferences and behaviors.

Insurers can also use AI to improve claim turnaround times and radically alter the underwriting process. AI also allows insurers to access data more quickly, and eliminating the human element can result in more accurate reporting in less time.

According to a PwC analysis, AI’s early influence will be focused on increasing efficiencies and automating customer-facing underwriting and claims processes. It will have a greater influence over time since it can anticipate, analyze, and underwrite developing risks as well as uncover new revenue opportunities.

Pricing Trends

UBI’s pricing structure differs significantly from that of typical auto insurance. Traditional auto insurance rating variables include driving record, credit-based insurance score, personal characteristics (age, gender, and marital status), vehicle type, garage location, vehicle use, past claims, liability limitations, and deductibles. Bundling numerous vehicles or types of insurance, insurance with the same carrier, protective equipment (like airbags), driving classes, and home-to-work miles are usually the only ways to save money on standard auto insurance.

Traditional vehicle insurance is thought of by policyholders as a set expense that is assessed annually and paid in lump sums on an annual, semi-annual, or quarterly basis. However, studies demonstrate a strong link between claim and loss expenses and distance travelled, particularly when current pricing rating criteria are taken into account (such as class and territory). As a result, many UBI programme attempt to turn fixed costs related with mileage driven into variable costs that can be combined with other rating elements in the premium calculation. Rather of depending on collected statistics and driving records, UBI uses individual and current driving behavior.

Regulatory Trends

For instance, Illinois compels carriers to disclose their underwriting models, whereas California restricts product pricing constraints. Insurance businesses are forced to create innovative goods and services that comply with regional rules due to inconsistent requirements. As a result, businesses must diversify their product portfolios. The regulatory structure encourages lower premiums for excellent driving behaviour in car usage-based insurance. As a result, ambiguities in legislation and legislative contexts may limit the expansion of the car usage-based insurance industry.

Post COVID-19 Recovery

The automotive industry is critical to the global economy. However, during the second and third quarters of 2020, the COVID-19 epidemic impacted the whole automotive supply chain on a worldwide scale, affecting new car sales in FY 2020. According to a research by OICA and Reogma Market Insights, new vehicle sales (including LDV and HDV) dropped by 14% in 2020.

COVID-19 had a negative influence on the auto industry. Insurance firms began making unprecedented steps such as lowering premiums, partial refunds, and so on. Furthermore, there was an increase in demand for new insurance products with low premiums. According to a J.D. Survey research, internet demand for new insurance policies has increased by 27% since March. Furthermore, around 40% of consumers were interested in telematics-based auto insurance choices as of May. Furthermore, due to the counties’ lockdown, the number of hours spent driving decreased.

In the month of April-May, driven hours in Washington fell from 29.2 percent to 11.6 percent, according to a study. In addition, the COVID-19 epidemic was shown to have influenced people’s propensity to embrace usage-based insurance in a survey. Around 10% of people said they were more willing to use UBI as of March 24, 2020. However, by the 12th of May 2020, the number had risen to 31%, which is 3.1 times higher than the previous results.

The COVID-19 pandemic, on the other hand, according to numerous insurance organizations/institutions, boosted the UBI industry. According to the Insurance Information Institute (iii), the United States had a significant increase since vehicle owners did not want to pay full automobile insurance costs.

Market Size and Forecast

The Usage Based Insurance in the U.S. Market is estimated at $9.8 Billion in 2020, and is poised to grow at a CAGR of 21.2% to reach a Market Size of US$ 30.91 Billion in 2026.

Based on policy type, the global UBI market may be divided into three categories: pay-how-you-drive (PHYD), pay-as-you-drive (PAYD), and manage-how-you-drive (MHYD). PAYD has spawned a particularly popular sort of UBI proposal. PAYD is the most basic UBI policy, in which premiums are calculated based on the number of miles driven as measured by the odometer or an implanted device that is usually tracked.

The demand for PHYD type UBI will rise during the projection period. PHYD lowers premiums by monitoring driving behavior including as acceleration, braking, location, and driving time. MHYD not only monitors conduct, but also provides feedback to the driver to encourage safe driving.

The PAYD (Pay-as-you-drive) usage-based insurance market in USA is predicted to generate more than USD 6 Billion in revenue by 2026, with a CAGR of over 20% which is expected to reach a Market revenue of USD 18 Billion in 2026, since it focuses on tracking miles travelled and pricing premiums based on mileage. The market outlook is bolstered by Canadian automobile groups’ supported initiative to enhance vehicle safety.

The PHYD (pay-how-you-drive) is valued at US$ 2.36 Billion in 2020, holding a Market Share of 24% and is poised to grow at a CAGR of 18.7% to reach a Market Size of US$ 6.6 Billion in 2026.

The Manage-How-You-Drive (MHYD) category is expected to increase at a CAGR of more than 24.1 percent over the forecast period to reach a Market Size of USD 5.53 Billion in 2026 from a value of US$ 1.47 Billion in 2020 This growth is linked to real-time insurance premiums and instantaneous driver feedback regarding his driving style. Integration of other linked services with MHYD packages, such as theft insurance plans and vehicle wellness reports, will also help to boost market growth.

Based on Technology, the UBI Market is segmented into OBD-II, Blackbox, Smartphone and Others. With a revenue share of 50.16 percent in 2020, the OBD-II sector topped the usage-based insurance for vehicle market in terms of revenue. The onboard dongles are connected to a vehicle and used to collect real-time data about specified events.

The OBD-II segment generated revenues to the tune of US$ 4.9 Billion in 2020 and is poised to grow at a CAGR of 22.3% to reach a Market size of US$ 16.4 Billion in 2026, The onboard dongles are connected to a vehicle and used to collect real-time data about specified events. They can evaluate everything from vehicle speeds and crashes to acceleration and braking. In addition, since insurers have begun to supply these dongles, there has been an increase in the use of OBD-II-based dongles.

Around the forecast period, the smartphone segment is expected to develop significantly, with a CAGR of over 24.3 percent to reach a Market Size of US$ 8.67 Billion in 2026 from a valuation of US$ 2.35 Billion in 2020. Because no external telematics device is necessary for car tracking, this technology’s popularity has skyrocketed. The smartphone allows insurance companies to monitor and track the driver’s driving habits. Insurers and customers benefit since they do not have to invest in the telematics device required for usage-based auto insurance. Furthermore, insurance companies are collaborating with software technology businesses to give smartphone-based telematics insurance.

The Blackbox technology holds a Market Share of 16% and is valued at US$ 1.57 Billion in 2020 and is projected to reach a Market Size of US$ 4.64 Billion in 2026 growing at a CAGR of 19.8%.

On the basis of Vehicle, UBI is classified into Passenger and Commercial Vehicle.

The passenger car sector dominated the market in terms of revenue in 2020, with an 88 percent share and is estimated at US$ 8.6 Billion in 2020 and is projected to reach a Market Size of US$ 26.26 Billion in 2026. This increase can be ascribed to increased sales of passenger automobiles with pre-installed telematics devices. The telematics device provides real-time data on the vehicle’s health, journey distance, and driving behavior. Furthermore, passenger car drivers can use telematics systems to improve their driving behaviors, resulting in lower insurance premiums and insurance discounts for safe driving.

During the projection period, the commercial vehicle segment is expected to grow at a significant CAGR of over 18.1 percent to reach a Market Size of US$ 1.17 Billion in 2020 which is expected to generate a Revenue of US$ 3.17 Billion in 2026. Because of the large number of business fleets present, the segment is expected to pick up speed quickly. Due to cheaper insurance premiums, business fleet owners are taking advantage of the advantages of usage-based insurance.

Market Outlook

Usage-based Insurance Market in USA is expected to reach US$ 30.91 Billion by 2026 from a Market Size of US$ 9.8 Billion in 2020.

Amid the COVID-19 crisis, the global market for Usage-based Insurance estimated at US$ 9.8 Billion in the year 2020, is projected to reach a revised size of US$ 30.91 Billion by 2026, growing at a CAGR of 21.1% over the analysis period 2020-2026.

PAYD, one of the segments analyzed in the report, is projected to record a 20.2% CAGR and reach US$ 18 Billion by the end of the analysis period. After an early analysis of the business implications of the pandemic and its induced economic crisis, growth in the PHYD segment is readjusted to a revised 18.7% CAGR for the next 6-year period.

In the global MHYD segment, USA will drive the 24.1% CAGR estimated for this segment. These regional markets accounting for a combined market size of US$ 1.47 Billion in the year 2020 will reach a projected size of US$ 5.53 Billion by the close of the analysis period.

Smart phones are becoming increasingly popular as mobile internet technology advances. As a result, data collected via intelligent mobile phones is possible, providing data sources for vehicle insurance study and application.

Technology Roadmap

Increased use of the Internet of Things by insurers Source:

Insurers can get more data on their clients and analyse it more thoroughly as a result of their increased usage of the Internet of Things, allowing them to better identify their needs and risks, as well as reduce the frequency and severity of claims. Connected home technologies and wearables are gaining traction around the world; according to the estimate, 29.5 billion devices will be in use by 2020.

Shift towards UBI in the car insurance sector Source:

An increase in smartphone capabilities, the growing number of linked automobiles, and the growing popularity of smartphone-powered apps and telematics all contributed to the transition toward UBI in the car insurance industry. Telematics usage-based insurance is estimated to be used by around 36 percent of motor insurers in 2020. This implies that new prospects for new direct insurance startups will emerge as a result of the development of new mobile apps.

Distribution Chain Analysis

Competitive Landscape

There are several prominent participants in the insurance telematics business. In terms of market share, nearly none of the market’s companies now hold a large lead. To stay on top, the market’s major competitors are concentrating their efforts on increasing their consumer base beyond international borders. These businesses are taking use of strategic collaboration initiatives to grow their market share and profits. To strengthen their product capabilities, industry players are also purchasing start-ups working on insurance telematics market technology.

Allianz SE, Allstate Insurance Company, Cambridge Mobile Telematics, Inseego Corporation, insurethebox, Intelligent Mechatronic Systems, Inc., Liberty Mutual Insurance, Mapfre, Modus Group, Octo Telematics Ltd., Progressive Corporation, Sierra Wireless, Inc., The Floow Ltd., TomTom International BV, TrueMotion, Unipolsai Assicurazioni S.P.A., Verizon Enterprise Solutions, Vodafone Group PLC are the major players in the Usage Based Insurance (UBI) Market in the USA.

Competitive Factors

Businesses in the Usage-Based Insurance sector are becoming increasingly engaged with beginning tactics such as targeted marketing, CSR programmes, and so on in order to increase their global significance. A striking tendency that can be seen across the board is that these businesses are now aiming to handle a certain business-related activity in a country with favourable legislation. As a result, many organisations are able to save costs while still employing industry experts at every important juncture of their operations.

For Instance, In June 2020 TATA AIG, a general insurance firm, for example, launched an AutoSafe gadget based on telematics technology. AutoSafe will be included in all insurance and will give $0.02 million in personal accidental coverage for both the owner and the driver. The Auto Safe gadget is GPS-enabled and connected to a mobile app that saves all data, tracks distance travelled, and generates reports about the policyholder’s automobile and driving habits.

In January 2021, The Allstate Corporation, a US-based insurance firm, purchased National General Holdings Corp for $4 billion. With the acquisition, The Allstate Corporation will be able to expand its personal lines insurance business and gain market share. National General’s accident and health business will broaden Allstate’s circle of protection. National General Holdings Corp is a personal line insurance firm established in the United States that offers personal and commercial auto insurance, as well as health insurance and other specialty insurance products.

Key Market Players

Some of the Key Players in the US Automotive Usage-based Insurance Market include

Allianz SE is a financial services firm established in Germany. The Allianz Group’s holding company is the business (Allianz SE and its subsidiaries). Property-Casualty, Life/Health, Asset Management, and Corporate and Other are the company’s segments. The company offers a variety of reinsurance coverage to third-party customers as well as Allianz insurance organizations. The Property-Casualty division provides both private and business clients with a variety of products and services. The Life/Health section offers a variety of individual and group life and health insurance products.

Allstate Corporation (Allstate) is Allstate Insurance Corporation’s holding company. Allstate Insurance Company, Allstate Life Insurance Company, and other subsidiaries are the primary conduits for the company’s operations. Its main lines of business are property and liability insurance in the United States and Canada. Other security options offered by Allstate include life, accident, and health insurance, as well as plans that cover technological devices and personal identities. Allstate Protection, Allstate Life, Allstate Benefits, Protection Services, and Allstate Annuities are among the company’s segments.

Inseego Corp. designs and develops fixed and mobile wireless solutions, as well as industrial Internet of things (IIoT) and cloud solutions for service providers, small and medium-sized organizations, governments, and consumers, Mobile hotspots, wireless routers for Internet of things (IoT) applications, USB modems, integrated telematics, and mobile tracking hardware devices are among the company’s products, which are backed by applications software and cloud services. MiFi technology is used in its mobile wireless solutions, which include fourth-generation (4G) long-term evolution (LTE) and fifth-generation (5G) new radio (NR) hardware devices.

Frencken Group Limited is an investment holding firm established in Singapore. The company specialises in providing capital equipment, automotive, and consumer goods solutions. It serves a diverse customer base of worldwide corporations with comprehensive outsourced solutions. Mechatronics and Integrated Manufacturing Services are the company’s two segments (IMS). For original equipment manufacturers, the Mechatronics division designs and manufactures complicated electro-mechanical assembly and automation systems. The IMS division of the business specialises in offering integrated solutions for the production of plastic components (including mould design and fabrication) and printed circuit board assemblies (PCBAs) for use in modules and completed products.

Progressive Corporation is a holding corporation for insurance companies. Personal and commercial automobile and property insurance, as well as other specialist property-casualty insurance and related services, are provided by the Company’s insurance companies. Personal Lines, Commercial Lines, and Property are the three segments in which the company operates. The Personal Lines section of the business insures personal automobiles and leisure vehicles. Primary liability, physical damage, and business-related general liability and property insurance are all written by the Commercial Lines division. It offers homeowners, condo, manufactured home, and renter’s insurance, as well as personal umbrella and main and excess flood insurance. Commercial auto insurance procedures/plans (CAIP) and commission-based enterprises are part of the Company’s service business.

Sierra Wireless, Inc. is working to establish the Internet of Things (IoT) by providing wireless solutions to businesses. The OEM Solution sector of the company sells cellular embedded wireless modules for IoT connectivity, as well as an embedded application framework to help customers develop their own applications. The Enterprise Solution sector of the company provides sophisticated routers and gateways, as well as management tools and applications for cellular connectivity.

TomTom NV, established in the Netherlands, is a provider of navigation and location-based products and services. The business is divided into two segments: Location Technology and Consumer. The Automotive and Enterprise companies in the Location Technology category supply maps, navigation software, and services as components to be incorporated into clients’ applications. Driver navigation is provided by the Consumer section, which includes directions, guidance, information, and inspiration for their road trips. Portable navigation devices and mobile applications are among its consumer items. The company operates out of over 40 locations in over 30 countries.

Verizon Communications Inc. is a holding company that owns other companies. Consumers, businesses, and government agencies benefit from the Company’s communications, information, and entertainment products and services, which are provided through its subsidiaries. Verizon Consumer Group and Verizon Business Group are its reportable segments. Wireless and wireline communications services are provided through its Consumer segment. Under the Verizon name, it provides wireless services across wireless networks in the United States (US).

Strategic Conclusion

In many ways, the current telematics business resembles the mid-2000s mobile phone sector, when new software developments and app ecosystems gave birth to the open mobile platforms we have today. The smartphone has evolved into a portal to a vast array of applications, services, and business models, all of which are produced in an open, standards-based environment and all of which use the same hardware and connectivity to reach the user.

Modern telematics systems have the ability to unleash that same degree of innovation for in-vehicle services, thanks to future-proof OBU devices, secure cloud management platforms, and shared data plans. Soon, drivers will be able to download apps and subscribe to new services without having to pay for redundant data gathering systems, allowing them to continue expand the possibilities for automotive VAS during the life of their vehicles.

Insurers can play a key role in this industry transition, given the considerable market demand for UBI. As a result, businesses will be able to acquire a larger portion of the market for the finest drivers, improve profitability, and build long-term client loyalty.

References

Appendix

UBI – Usage-Based Insurance
OBD – On-Board Diagnostics
US$ – US Dollars
CAGR – Compounded Annual Growth Rate
GSMA – Global System for Mobile Communications
IMS – Intelligent Mechatronic Systems
EIU – Economist Intelligence Unit
AI – Artificial Intelligence
PAYD – Pay as You Drive
PHYD – Pay How You Drive
PAYG – Pay as You Go