Telematics in China: 2016 Update
China has the world’s largest number of Internet users and the largest number of drivers. Many companies in China see opportunity in telematics and are investing in various devices, platforms, models, and services. Insurers are part of this telematics ecosystem.
In the report Telematics in China: 2016 Update, Celent analyzes telematics in China and related initiatives from insurance companies.
In June 2015, the China Insurance Regulatory Commission (CIRC) had begun commercial automobile insurance reform for premium pricing and terms management in six pilot locations. The reform allows insurance companies to develop their own coverage and calculate premiums that better reflect drivers’ risks.
Some small insurers could disrupt the market by introducing usage-based insurance (UBI), putting pressure on larger companies to study and invest in this area.
For the individual UBI market, pilot insurers are focused on providing various services or benefits to encourage more drivers to use the on-board diagnostics (OBD) device or mobile apps. Insurers are collecting more driving data and trying to use this data to set up their risk models. When the market is ready for UBI, these pioneering companies will have an advantage.
For the commercial vehicle UBI market, insurers are already collecting and analyzing data to improve pricing and working with companies to improve drivers’ driving behaviour and reduce claims.
Since 2014, many Internet companies (especially Baidu, Alibaba, and Tencent, known collectively as BAT) see enormous opportunities. Telematics platforms could be a portal for online-to-offline (O2O) services and various location-based services for drivers.
“BAT is entering the market to change car manufacturing, aftermarket devices, and services,” says Wenli Yuan, a senior analyst with Celent’s Asian Financial Services group and author of the report. “Insurance companies and technology solution providers should understand the telematics ecosystem and chose partners wisely.”
This report contains two tables and three figures.