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Automotive Usage Based Insurance (UBI) Opportunity Expanding
Telematics-Enabled UBI Hardware Will Double
Boston, MA - September 1, 2010 – The expansion of OEM based telematics solutions is leading to increased opportunities for technologies seeking to leverage greater connectivity. According to the Strategy Analytics report, “UBI: Policy Holders Grow, Technology Plateaus,” the rise of telematics solutions has led to insurance based telematics opportunities. However problems with pricing, consumer awareness and privacy concerns are hampering adoption.
“Despite this potentially large market, major obstacles remain before telematics-supported UBI plans can achieve high adoption rates,” noted Richard Robinson, Director of Strategy Analytics’ Automotive Multimedia and Communications Practice. “High hardware costs as well as incremental service costs are slowing the consumer migration to telematics-enabled UBI plans.”
According to John Canali, Analyst with Strategy Analytics, “Falling telematics module ASPs and an increase in the number of OEM installed telematics units will help stimulate demand, but rapid adoption is largely dependent on realigning the business model. The numerous stakeholders—including OEMs, tier suppliers, insurers, and government bodies—must work together in order to share costs and increase awareness.”
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