Do Vodafone and Telefonica deals highlight a new era for M2M Usage-based Insurance (UBI)?

Usage-based Insurance, or UBI, the system by which policyholders' driving data is reported via telematics devices to an insurance carrier for purposes of adjusting premiums, has been attempted a number of times over the last few years, with insurers such as Progressive in the United States and Norwich Union (Aviva) pioneers in the area of linking driving behaviour to insurance premiums. Nevertheless, programs launched previously have stuttered due to various challenges including data privacy issues, regulatory challenges, the ability of insurers to convey benefits adequately to consumers, and quality, robustness and reliability of Telematics devices and software. However, the M2M landscape has changed significantly; a broad proliferation of efficient connectivity platforms offered by carriers, improved telematics devices and application software platforms, and greater willingness among users to share information in exchange for lower premiums, is making it easier for insurers to rationalize rolling out UBI telematics programs. As a result, a number of carriers and insurance companies are forging partnerships to drive UBI forwards into the market. This report looks at opportunities in the UBI market and at several partnerships in the UBI space; Vodafone and Towers Watson and Telefonica and Generali, as well as assessing some of the opportunities and challenges that lie ahead in the UBI market.

Usage-based Insurance, or UBI, the system by which policyholders' driving data is reported via telematics devices to an insurance carrier for purposes of adjusting premiums, has been attempted a number of times over the last few years, with insurers such as Progressive in the United States and Norwich Union (Aviva) pioneers in the area of linking driving behaviour to insurance premiums. Nevertheless, programs launched previously have stuttered due to various challenges including data privacy issues, regulatory challenges, the ability of insurers to convey benefits adequately to consumers, and quality, robustness and reliability of Telematics devices and software. However, the M2M landscape has changed significantly; a broad proliferation of efficient connectivity platforms offered by carriers, improved telematics devices and application software platforms, and greater willingness among users to share information in exchange for lower premiums, is making it easier for insurers to rationalize rolling out UBI telematics programs. As a result, a number of carriers and insurance companies are forging partnerships to drive UBI forwards into the market. This report looks at opportunities in the UBI market and at several partnerships in the UBI space; Vodafone and Towers Watson and Telefonica and Generali, as well as assessing some of the opportunities and challenges that lie ahead in the UBI market.