The impact of telematics on the motor insurance industry
"There is a wide variety of pricing parameters used on the motor insurance market today - in many cases it is doubtful if their validity is statistically proven. For fleets, there is a 'disconnection' between needed and available information", Michael THEILMEIER, Senior Vicepresident, GEN Re, explained during the Motor Insurance Conference at FIAR 2017.
After analyzing the current pricing parameters used today, Michael THEILMEIER talked about the new technologies and their impact on the motor insurance market.
By 2035, (partially) autonomous vehicles could represent one quarter of all new car purchases worldwide, said the Senior Vicepresident of GEN Re, quoting data published by BCG - The Boston Consulting Group in April 2015. This will lead to a dramatic decrease in premiums.
Another technology with significant impact on today's motor insurance market is represented by telematics system. The insurance usage of the telematics technology is yet to reach its maturity. Italy is currently the most advanced country when it comes to telematics usage, being situated in the "learning phase" (where only a few top players understand telematics' full potential, define their own approach and push the selling phase). Countries such as Spain, Canada, US or UK are still in the "exploration phase" (a few pioneers launching pilot phases), while Germany and France have only entered the "incubation phase" (where first pilot companies launching these products focus on prices).
Regarding the popularity of telematics in the Central and Eastern European region, Michael THEILMEIER considers that the tariffs are too low for such products to be really useful on the passenger cars segment. "I am very skeptical about telematics for passenger cars in the CEE. The rates are too cheap", he explained. On the other hand, they could be really useful in the case of truck drivers, because they offer: GPS tracking in real time, predictive diagnostics, driver profiling and driver behavior functionality, fuel savings, reduced maintenance, and driver compliance.
Author: Adina TUDOR
Comment this article