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Growth in OEM-Based Telematics Solutions to Give a Boost to Automotive Usage Based Insurance Opportunities

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Growth in OEM-Based Telematics Solutions to Give a Boost to Automotive Usage Based Insurance Opportunities

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September 02, 2010
By Divya Narain
TMCnet Contributor

According to recent Strategy Analytics findings, the spurt in OEM-based telematics solutions is set to result in greater opportunities for technologies seeking to leverage greater connectivity. Recently TMCnet had reported OEMs are jacking up their offerings of vehicle telematics services and vehicle-device connectivity solutions and that not only are they entering new markets but they are also enhancing product features. 


In its recent report titled “UBI: Policy Holders Grow, Technology Plateaus,” Strategy Analytics (News - Alert) the rise of telematics solutions has led to insurance based telematics opportunities. This, despite challenges like pricing, consumer awareness and privacy concerns.

 “Despite this potentially large market, major obstacles remain before telematics-supported UBI plans can achieve high adoption rates,” noted Richard Robinson, director of Strategy Analytics’ Automotive Multimedia and Communications Practice. “High hardware costs as well as incremental service costs are slowing the consumer migration to telematics-enabled UBI plans.”

According to John Canali, analyst with Strategy Analytics, “Falling telematics module ASPs and an increase in the number of OEM installed telematics units will help stimulate demand, but rapid adoption is largely dependent on realigning the business model. The numerous stakeholders—including OEMs, tier suppliers, insurers, and government bodies—must work together in order to share costs and increase awareness.”

Boston-based Strategy Analytics, Inc is a leading research organization that concentrates on market opportunities and disruptive forces in the areas of Automotive Electronics and Entertainment, Broadband Connected Home, Mobile & Wireless Intelligent Systems Implementation Strategies and High Frequency Market intelligence. The company has offices in the UK, France, Germany, Japan, S. Korea and China. It associates with clients through annual multi-client services, management team workshops and custom consulting engagements. 


Divya Narain is a contributing editor for TMCnet. To read more of Divya’s articles, please visit her columnist page.

Edited by Juliana Kenny

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