Europe News: Telematics-based car insurance market to hit €478m in 2015

Europe News:  Telematics-based car insurance market to hit €478m in 2015

The European market for telematics based car insurance systems is poised for explosive growth from 2007 to 2015, mainly due to the continuous entry of new participants, the positive impact of the eCall legislation and overall growth in the GPS market.

According to new analysis from Frost & Sullivan, “Strategic Analysis of the European Market for Telematics based Insurance Systems”, this market earned revenues of €2.5 million in 2007, and is estimated to reach €477.8 million in 2015.

“The eCall feature scheduled to be made mandatory for all new cars in Europe from September 2010 onward and the introduction of PAYD will make integrated telematics easy to market,” notes Frost & Sullivan industry analyst Shyamsundar Anandhan. “This is an important development since the success of the telematics-based insurance model will eventually depend on companies’ ability to integrate various telematics features into one device as well as provide a low-cost service.”

PAYD adds great value to the in-car telematics package, as it offers a good opportunity to save on annual insurance premiums for certain drivers, particularly low-mileage drivers and those in the 18-24 age group.

As the PAYD product works on GPS technology and with eCall expected to become mandatory for all new cars from September 2010, suppliers can look to promote PAYD insurance as a standard addition in all cars. Thus, the potential of PAYD in the original equipment (OE) market could be significant.

Another advantage of telematics-based insurance systems is that the vehicle’s route and speed can be fully traced, virtually eliminating insurance fraud.

However, insurance companies face a major challenge in their ability to convince potential customers to incur the initial set-up cost for PAYD. Another challenge lies in convincing high-mileage drivers about the utility value of other integrated features in the package. Data protection is also a potential threat to the PAYD model in certain European countries, where laws do not permit personal data to be available in the public domain.

“A high level of co-operation is needed among insurance companies, mobile network providers, data management solution providers and other supporting companies to carry the concept to all types of drivers in both the passenger car market and the commercial vehicle segment,” says Anandhan.

Telematics Update’s LCV Management 2007 conference, which takes place in London on November 8-9, 2007, has been created as a platform for visionary companies in the insurance, mobile network provider and data management solution provider industry segments.

For more information about the conference, visit: www.telematicsupdate.com/info/376, or contact Puja Pankhania: [email protected] or phone +44 207 375 7563, or 1 800 814 3459 ext 251 (US toll-free)


Leave a comment

Your email address will not be published. Required fields are marked *