Technology is set to transform the motor insurance industry over the next decade, with telematics-based premiums predicted to be widespread within five years.
30 APRIL 2018 | CHRIS SEEKINGS
A YouGov survey of UK and US insurers has found that 53% expect most drivers to use telematics by 2023, with a third believing all motorists will be scored on driving ability within a decade.
A quarter think fully autonomous vehicles will become a reality over the next five years, with 48% expecting most cars to be hybrid, and 39% predicting the majority to be electric.
"Insurance leaders are correct to predict that telematics will be a game changer in the field of insurance," said Aldo Monteforte, CEO at The Floow, which commissioned the research.
"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."
The greatest impacts on the insurance industry beyond telematics and autonomous cars are expected to revolve around mobility and the number of people that actually own cars.
It was found that 29% of insurance chiefs believe car-sharing will replace outright ownership within 10 years, with a significant move towards usage-based insurance anticipated.
The findings also show that a quarter expect greater incentives for people to drive less, and more insurance services offered by non-financial brands.
Comparing predictions between the UK and US, it was found that British insurers were more likely to expect an uptake in electric and hybrid vehicles over the next decade.
In contrast, US insurers were far more likely to anticipate autonomous vehicles and car-sharing during that time.
"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," Monteforte continued.
"The extraordinary rate of change is being driven by demand for uniquely tailored policies to ensure drivers are paying a fair amount for the way they drive.
"On a wider scale, the technology is there to encourage us to drive better and make our roads safer, benefiting everyone."