Introducing insurance telematics

PTOLEMUS Consulting Group
Introducing insurance telematics
Insurance Telematics Europe Conference
London - 7th May 2013 - PTOLEMUS intellectual property
PTOLEMUS in a nutshell
PTOLEMUS is the first strategy consulting firm focused on
telematics and geolocation
Our consulting services
Our fields of expertise
Strategy
definition
Evaluation of
investment
Procurement
strategy
New market entry,
business plan
development,
board coaching
and support
Strategic due
diligence,
market
assessment,
feasibility studies
Specification of
requirements,
launch of tenders,
supplier negotiation
& selection
Innovation
management
Product & services
development,
roadmap definition,
project
management &
launch, patent
strategy
PTOLEMUS
Business
development
Partnership
strategies,
response to RFPs,
lobbying
Implementation
Project &
programme
management, risk
analysis &
mitigation strategy
Mobile content and social networking
Application stores, crowd-sourcing, etc.
Navigation & location-based services
Maps, traffic, fuel prices, speed cameras, parking, etc.
Usage-based charging
PAYD / PHYD insurance, Road User Charging,
PAYD car leasing & rental
Telematics & Intelligent Transport Systems
Connected car, tracking, fleet management, eCall, bCall,
Stolen Vehicle Recovery, Car As A Service, connected train,
etc.
Positioning / Location enablement
M2M & connectivity
2
PTOLEMUS in a nutshell
Who we have helped
Telecom operators
OEMs & telematics vendors
Content & application providers
Telecom infrastructure providers
PTOLEMUS
Insurers & assistance providers
Consulting Group
Consumer electronics makers
Positioning solution providers
•
•
•
Partners in Brussels, Paris, Hamburg, Milan
and the UK
+50 years of experience in mobile
+100 years of experience in telematics
ITS operators & regulators
Financiers
Montezemolo &
Partners
PTOLEMUS
3
PTOLEMUS in a nutshell
We recently published the Insurance Telematics study, the
most comprehensive report written on the subject
• 410 pages of analysis on the
PAYD / PHYD market based on
- 83 interviews in 18 countries
- 230 figures (charts, tables...)
- 2 years of research
- Our experience & vision of the
ecosystem incl. OEMs and TSPs
More than a research study,
a real strategic market
analysis
PTOLEMUS
• Case studies & learnings from
ALD Automotive, Amaguiz,
Coverbox, Discovery Insure, GM
OnStar, Hollard Insurance,
Insurethebox, Liberty Mutual, MAIFMACIF, Norwich Union, Octo
Telematics, Progressive, Solly Azar,
State Farm, Unipol, Uniqa, Zurich
• A handbook of suppliers'
• 10-year market forecasts
- Country's readyness to telematics
- Forecasts for the US, Italy, the UK,
France, Germany and Russia
• Insurer's telematics market
model results in 4 markets*
• A complete set of
recommendations to
underwriters, TSPs, OEMs,
MNOs and governments
• A strategic analysis of the value
chain evolution including
- The impact of eCall
- The impact of the smartphone
- The effects of the gender ruling
solutions including our own
evaluation & ranking
Note: A free 60-page abstract can be downloaded from www.ptolemus.com/insurance
3
Introducing insurance telematics
What is insurance telematics?
Its basic principles
The driving risk star
• Most underwriters currently
use static / statistical criteria to
evaluate drivers' risks - Age,
gender, vehicle make & age,
place, business category,
occupation, etc
Distance
Static
criteria
(statistical)
Time
Historical
claims
profile
Place
• The historical claims profile is
also taken in account
• Insurance telematics is a
policy based on these criteria
and 4 new dynamic
parameters
Source: PTOLEMUS
Driving
behaviour
Introducing insurance telematics
Let us share all the same definitions
Behaviour
PHYD
PAY-PER-MILE
(Self-reportingbased policies)
U B I
PAYD
No telematics
Telematics
INSURANCE TELEMATICS
Current motor insurance
STOLEN
VEHICLE
RECOVERY
SAFETY
SERVICES
(eCall / bCall)
CRASH
FORENSICS
No behaviour
PTOLEMUS
Source: PTOLEMUS
6
Introducing insurance telematics
In the current motor insurance market, safe drivers are
paying for... dogs
On the Internet, nobody knows you're a dog
Source: The New Yorker, mchumor.com
In the car, neither...
7
Introducing insurance telematics
Who's doing what?
Behaviour
PHYD
PAY-PER-MILE
(Self-reportingbased policies)
U B I
PAYD
No telematics
Telematics
INSURANCE TELEMATICS
Current motor insurance
STOLEN
VEHICLE
RECOVERY
SAFETY
SERVICES
(eCall / bCall)
CRASH
FORENSICS
No behaviour
PTOLEMUS
Source: PTOLEMUS
8
Introducing insurance telematics
Usage-based insurance has reached all the most mature
insurance markets
Usage-based insurance: Worldwide trials & launches
0
PTOLEMUS
1
2
5
10
Source: PTOLEMUS - Note: Trials and launches in personal line & commercial lines
20
40
9
Introducing insurance telematics
We expect it to reach new markets, notably in Asia
Insurance Telematics Study - Worldwide sales
0
PTOLEMUS
Source: PTOLEMUS
25
50
100
150
200
250
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Why insurance telematics matters
The time has come for insurance telematics
Insurance telematics has been through
the peak & disillusionment phases
ABI publishes
good practice
guide
Test-Achats
gender ruling
European
Commission
Launch of
Insure The Box decides to
mandate
in the UK
eCall
Norwich Union
launches PAYD
offer
Toyota &
Aioi launch
PAYD on
Toyota's GBook
Norwich
Union stops
PAYD
programme
Unipol &
Aurora launch
Octo's solution
Launch of
Coverbox by
Cobra Wunelli
Towergate
Zurich
& Aviva launch launches Fleet
PAYD
Intelligence
commercial
PHYD offer
insurance
Autoline
launches 1st
smartphone
solution
Amaguiz
launches 1st
OBD solution in
Europe
Progressive
reaches 1 M
cum. UBI
customers
EC
published
eCall delegated
act to mandate
eCall by
2015
1st OEM
policies
Monti law
implementation
OEMs freeze
eCall devices
specs
Progressive
launches
MyRate, 1st
PHYD offer
The AA and
Admiral launch
NYC &
Qualcomm Massachussets
PHYD offers
Groupama
launches
investigate
launches
PAYD / PHYD
PAYD
Amaguiz PAYD
solution
Gender ruling
models
MAIF &
system
becomes
MACIF launch
Moody's
applicable
unsuccessful
recommends
Renault
telematics Progressive
ÖSA launch usage-based
launches
offer
telematics offer insurance
renames
MyRate commercial line in Germany
PAYD
Snapshot
programme
Discount
Norwich Union
launches PAYD
trial
Progressive
pilots TripSense
UBI program
Unipol trial of
Octo's solution
Technology
trigger
2003
2004
PTOLEMUS
Peak of
expectations
2005
2006
2007
Source: PTOLEMUS, based on Gartner's Hype Cycle
2008
2009
Maturity
Enlightenment
Disillusionment
2010
2011
2012
2013
11
Introducing insurance telematics
What are the market drivers of UBI in Europe?
Motor market
imbalances
Increased customer
acceptance
Regulatory
drivers
TELEMATICS
TAKE-OFF
Growth of online
insurance
Competition
Economic
crisis
PTOLEMUS
Source: PTOLEMUS
Decrease of
technology costs
12
Introducing insurance telematics
UBI is the fastest growing segment of motor insurance
Market premiums generated from telematic policies (€ million)
Motor insurance premiums generated from insurance telematics
25 000
20 000
Rest of Europe
Russia
Rest of EU
UK
Italy
Germany
France
15 000
10 000
5 000
0
2012
PTOLEMUS
2013
2014
2015
2016
Source: PTOLEMUS market forecasts - Note: Includes eCall-enabled UBI
2017
2018
2019
2020
13
Introducing insurance telematics
The paradigm of fleet motor insurance is changing radically
TODAY
2020
CURE
High claims ratio
Fraud, theft, etc.
PROTECT & PREVENT
High expense ratio
Driving behaviour advice, eCall / bCall, fuel management,
remote diagnostics, etc
OPAQUE & FOCUSED ON THE PAST
No understanding of actual risks, only of past risks
TRANSPARENT & PREDICTIVE
Real-time visibility on risks, crashes, thefts, etc.
DIVERGING INTERESTS
"Higher premiums: more profits for the insurer"
ALIGNED INTERESTS
"Lower premiums, lower claims: more profits for the insurer"
PTOLEMUS
Source: PTOLEMUS
14
Introducing insurance telematics
"I have no time to see a salesman, I have a battle to fight"
PTOLEMUS
15
Conclusion
Telematics is changing the rules of the game
• The growth of telematics is just starting
- The gender ruling will show its effects
- An age ruling is around the corner
- We are now 28 months before eCall
- How many insurers have really leveraged
telematics to reduce claims?
• Not all insurers will benefit
- "The data will come to us" is not the right
strategy
Enjoy the conference!
- Pan-European telematic strategies & units in
place
• The risks of standing still are far greater
than the risks of moving to UBI
• But each insurer / broker needs to find its
own way
PTOLEMUS
23
PTOLEMUS Consulting Group
Strategies for Mobile Companies
Brussels - Hamburg - London - Madrid - Milan - Paris - Boston
contact@ptolemus.com
www.ptolemus.com
Frederic Bruneteau, Managing Director
fbruneteau@ptolemus.com
+32 4 87 96 19 02 @PTOLEMUS