ABI Research Assesses Rapidly Transforming Automotive Industry as UBI Market Achieves 10 Million Subscribers

Market Faces Requirement to Redefine Itself for the Driverless Vehicle Era
21 Dec 2015

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.

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, 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.

About ABI Research

ABI Research is a global technology intelligence firm uniquely positioned at the intersection of technology solution providers and end-market companies. We serve as the bridge that seamlessly connects these two segments by providing exclusive research and expert guidance to drive successful technology implementations and deliver strategies proven to attract and retain customers.

ABI Research 是一家全球性的技术情报公司,拥有得天独厚的优势,充当终端市场公司和技术解决方案提供商之间的桥梁,通过提供独家研究和专业性指导,推动成功的技术实施和提供经证明可吸引和留住客户的战略,无缝连接这两大主体。

For more information about ABI Research’s services, contact us at +1.516.624.2500 in the Americas, +44.203.326.0140 in Europe, +65.6592.0290 in Asia-Pacific, or visit www.abiresearch.com.

Contact ABI Research

Media Contacts

Americas: +1.516.624.2542
Europe: +44.(0).203.326.0142
Asia: +65 6950.5670

Related Service