In its latest research, PTOLEMUS Consulting Group discovered that connected auto insurance is increasingly replacing traditional auto insurance, driven by the COVID pandemic but also by the OEMs’ own initiatives.
The Global Connected Auto Insurance Study finds that many insurers now write over 50% of new business with connected auto insurance. Additionally, at least 13 OEMs have launched insurance telematics products over the past two years, all of which use built-in connectivity.
Research Director Dr Andrew Jackson said: “When car use collapsed during COVID-19 lockdowns, policyholders demanded prices based on actual mileage. Internal UBI programs only use data from connected cars, which excludes insurers and telematics service providers (TSPs) from the equation. “
At least 17 OEMs sell connected car services with dynamically priced insurance already available from Ford, GM, Kia, Hyundai, Mercedes-Benz, Stellantis, Tesla, Toyota and Volkswagen. Many car manufacturers have also formed insurance partnerships (eg Ford with Arity, GM with American Family, Ford with Octo Telematics, PSA with AXA, Daimler with SwissRE).
Dr Jackson concluded, “Keep in mind that insurance typically accounts for 10-15% of a vehicle’s TCO (total cost of ownership). Thus, the ability to reduce this would have a major positive impact on OEM sales, especially to fleets.
PTOLEMUS ‘flagship report analyzes OEM strategies and challenges for insurance companies. It analyzes 15 key countries and regions, across 5 continents, includes forecasts to 2030 and profiles the 26 major insurers and TSPs.