From the Senior Vice President
Telematics is sexy. It has all of the ingredients of a bestseller: mystery (Will it be the dominant product design for the auto industry?); intrigue (Will an industry player be the winner, or will it be someone outside the industry? What will regulatory authorities do?), and a whole raft of exotic strangers (or as they're known in our world, "vendors"). However, in most markets, telematics has yet to establish itself. At best, the winning model is emerging.
In our report on telematics opportunities in China, we look more deeply into the readiness of the world's most populous nation, which has aspirations for ever greater car ownership, to take on telematics as a model for auto insurance. With regulation in progress to further liberalize the market and national initiatives to promote the "Internet of Vehicle," China could become one of the largest markets for telematics-based insurance products, but it's not ready just yet.
That said, if China were to follow the UK, which is considered one of the more advanced telematics markets with current adoption rates of just 1% and annual growth in adoption rates of about 180%, it would equate to a market opportunity of 1.2 million policies growing at a rate of 24% per annum tracking civilian vehicle growth rates. The reality is that this growth could be higher as national initiatives take hold and consumer adoption rates track product awareness.
The appeal of telematics is fascinating, but, as with everything with insurance and China, the market will not be easy to navigate. However, it will be one to watch as the plot develops!
Global Senior Vice President, Insurance
Chart of the Month
From the Celent report Telematics Opportunities in China’s Insurance Market
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