Market Faces Requirement to Redefine Itself for the Driverless Vehicle Era
LONDON, Dec. 21, 2015 /PRNewswire/ -- The Usage Based Insurance (UBI) subscriber base broke through the 10 million member barrier, mainly driven by adoption in the U.S. and Italy. While this might represent a turning point for the market to accelerate uptake in the wake of many international deployments, obstacles are looming large. In its recent report, ABI Research, a leader in technology market intelligence, discusses the status and future of the UBI market, highlighting challenges and opportunities in a quickly transforming automotive industry as it embraces new paradigms such as active safety, automation and car sharing.
Read ABI Research's The Future of Usage Based Insurance report: https://www.abiresearch.com/market-research/product/1018891-the-future-of-usage-based-insurance/.
Impediments to the automotive industry include privacy concerns, low awareness and perceived value, lack of scalability of on-board diagnostics (OBD) approaches and unclear future business models. In particular, UBI first-mover profitability gains, based on the self-selection of low-risk drivers, will ultimately not be sustainable. The auto insurance industry aims to address these issues through smartphone and embedded car OEM approaches, integration of UBI in a wider set of telematics and connected car services, turnkey solutions and customer-centric CRM approaches, and the use of contextual rating variables.
"While the auto insurance industry actively addresses issues, it is important to note that ADAS in the short term and driverless vehicles in the long term will dramatically reduce accident risk," says Dominique Bonte, Vice President at ABI Research. "This will inevitably result in UBI and auto insurance largely losing its relevance, which is a reality that the involved parties are often reluctant to accept."
The new automotive smart mobility landscape offers multiple original opportunities for UBI providers who are keen on leveraging their data analytics assets, risk assessment and auditing expertise:
- Getting Involved in the Connected Car Big Data and Analytics Explosion through a wide range of services from traffic, weather, parking spaces and prognostics to AI-enabled driver car algorithms, including quality and performance monitoring
- Extending Offers from Personal Insurance to product, fleet and corporate liability coverage
- Launching Cyber Security Services and Insurance, especially related to real-time monitoring of vehicles on the road
With automotive safety threats expected to shift from the physical to the digital environment, auto insurers will need to transform their operations accordingly, as already illustrated by Allianz's recent investment in Deep Packet Inspection (DPI) vendor Argus Cyber Security's $22 million series B round.
"In this respect, UBI should be seen as a stepping stone toward a more holistic risk assessment and insurance approach," concludes Bonte. "It will address new challenges in a smart mobility landscape consisting of shared driverless vehicles, multimodal transportation, and an experience-based, usage- and data-centric IoE environment."
These findings are part of ABI Research's Automotive Safety and Autonomous Driving Service (https://www.abiresearch.com/market-research/service/safety-and-security-telematics/), which includes research reports, market data, insights and competitive assessments.
About ABI Research
For more than 25 years, ABI Research has stood at the forefront of technology market intelligence, partnering with innovative business leaders to implement informed, transformative technology decisions. The company employs a global team of senior analysts to provide comprehensive research and consulting services through deep quantitative forecasts, qualitative analyses and teardown services. An industry pioneer, ABI Research is proactive in its approach, frequently uncovering ground-breaking business cycles ahead of the curve and publishing research 18 to 36 months in advance of other organizations. In all, the company covers more than 60 services, spanning 11 technology sectors. For more information, visit www.abiresearch.com.
SOURCE ABI Research