Telematics has become a hot topic in recent years, with more and more insurers and brokers launching telematics-based motor insurance products. Telematics has the potential to improve the accuracy of risk assessment and pricing, as well as to increase touchpoints with customers and build relationships. However, insurers need to be aware of its limitations and shape their strategies accordingly.
Analyze the limitations and benefits of telematics for insurers and consumers.
Inform your strategy to maximize the long-term gains of a telematics proposition.
Examine the incentives for consumers to opt for telematics, and the segments that are most likely to do so.
Gain insight into the key issues affecting the telematics market, and what the future of this space will look like.
How can telematics improve your pricing methods for motor insurance?
What are the other major benefits of telematics for insurers?
Which market segments are most likely to opt for telematics-based insurance products?
What will the telematics space look like in the future?
There is significant variance in the implementation costs of different telematics devices and the quality of data gathered by each. Market segmentation is vital in adapting insurer propositions to the limitations of different device types.
Considering the directly financial benefit of premium discounts, only the high-risk young driver segment is likely to derive significant benefit from telematics.
As an increasing number of vehicle manufacturers produce telematics-enabled cars, insurers will be pushed more and more into the periphery of the distribution chain. This process seems inevitable in the long run, but insurers can maximize gains by investing in telematics propositions early and building expertise in the analysis of telematics data.
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