More than nine in 10 insurance chiefs predict significant changes to the motor insurance industry in the next ten years, with more than half expecting telematics to be used by most drivers within five years, according to new research conducted by YouGov.
Telematics-based premiums are more widely expected be a reality in the next five years than the widespread adoption of hybrid or electric cars, the respondents said. While 53% agreed most premiums would be based on actual driver behaviour, only 48% thought most cars on the road would be hybrid, and 39% thought most cars would be electric cars.
The participants – 119 insurance board directors and department heads from the UK and US – identified changes in mobility and car ownership as the trends that would have the greatest impact on the insurance industry after telematics and autonomous cars.
29% of respondents believed there would be greater car-sharing, replacing outright car ownership, and a move to usage-based insurance. Other changes cited included greater incentives for people to drive less, and an even greater provision of insurance services from non-financial brands.
While insurance chiefs on both sides of the pond shared a vision for widespread technology advances in the next 10 years, UK insurance leaders were significantly more likely to envisage electric or hybrid cars on the roads as a norm in the near future. However, those from US insurers were far more likely to anticipate autonomous cars and peer-to-peer car and ride share.
The study was commission by mobility and telematics firm The Floow, which works with insurers, fleet operators and motor manufacturers across the US, Europe, Africa, South America and China.
“The extraordinary rate of change that is occurring in personal mobility and the insurance industry is being driven by two factors: the possibilities of what technology can offer; and demand for uniquely tailored policies to ensure drivers are paying a fair amount for the way they drive,” Aldo Monteforte, CEO and founder of the company, said.
“On a wider scale, the technology is there to encourage us to drive better and make our roads safer, benefiting everyone,” he continued.
“Our relationship with cars – how we drive, if we drive, whether we own, co-own or rent them – is already changing, and with this will come changes in the insurance sector. Insurance leaders are correct to predict that telematics will be a game changer in the field of insurance. We are entering the age where we can precisely quantify the risk of every driver, redefine insurance, and help them become safer on the roads.”