With the 12th Navigation Forum the 6th International Conference «Smart Insurance»

30 January 2018
We hope it’s no longer a secret that jointly with the 12th Navigation Forum the 6th International Conference «Smart Insurance» will be held. The economic situation in Russia seriously challenges the smart insurance market . The clear understanding of the situation on global and Russian insurance telematics markets will allow developing a strategy to popularize smart insurance services among car owners in Russia. J’son & Partners Consulting presented key barriers and drivers of the smart insurance market growth in its analytical report.
The smart insurance market growth in volume is largely determined by introducing telematics systems and monitoring systems into motor transport. The growing demand for smart insurance products is based on advantages of insurance telematics in comparison with traditional insurance methods. Foremost among them is the collection of data on a motorist’s driving style usingtelematics equipment. The resulting data is used to calculate an insurance policy cost. This solution allows making the most accurate assessment of the user driving and calculating risks, as well as determining the cost of compensation in the case of a road accident.

For 2017 the insurance telematics products penetration rate was 3 %. Such a small percentage permits a conclusion about such a weak growth of the Russian smart insurance market that was the result of a weak economic performance having caused the Russian Autokasko market slackening in 2016. In 2017 the negative dynamic was overcome, however, simultaneously, there was a decrease in Autokasko average insurance premium and total premiums.

In comparison, according to Berg Insight’s data, for 2015 in the world’s insurance telematics market there were 11.6 million smart insurance policies in Europe and the USA(5.3 million in Europe and 6,3 million in the USA). By 2020 the European and north-american market are predicted to reach 25.8 million and 42.1 million policies.

The insurance market participants are forced to search for new ways of development, cost optimization and rise inprofitability. The use of upgraded ERA-GLONASS terminalsand embedded solutions from automakers, as well as the active use of mobile apps replacing OBD dongles, blackboxes and other telematics devices, may give a significant boost to the smart insurance market.

In 5 years term the smart policy penetration in the aftermarket area may reach 350 thousand (no more than 10% of effective Autokasko policies ) through the use of ERA-GLONASS-based embedded telematics solutions on the basis of «ERA- Glonass» (including the compulsory insurance area) – 3.25 million.

J’son & Partners Consulting highlights the following drivers of the smart insurance market growth:
  • the opportunity to provide extra services, for example, anti-theft alarm
  • E-Call, B-Call and other value-added services
  • the general global trend towards increasing the number of embedded telematics solutions in motor insurance

  • J’son & Partners Consulting considers the following to be major barriers for the development of the smart insurance market in Russia:
  • The rejection of any voluntary insurance type due to reduced disposable income
  • The conservatism of insured persons, distrust of insurance companies, concerns on the failure to ensure data confidentiality.

  • On the basis of data obtained we can conclude that the smart insurance market development in Russia is primarily achieved through the introduction of extra services, as well as telematics systems and monitoring systems, into motor transport. The transformation of a car into a kind of gadget will widely disseminate insurance telematics products and services related to them. The Conference «Smart Insurance», which will gather insurance market representatives and telematics platform developers, is aimed at developing solutions for the insurance telematics market in Russia. Your participation as a professional in this industry may be crucial to its development.

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