Commercial insurance applications are expected to be the fastest growing sector for telematics deployment over the next five years, according to intelligence released this week.
A report from market intelligence company Transparency Market Research estimates that in terms of compound annual growth rates, the insurance sector will be the driving force of the global telematics market through to 2020.
In the insurance industry, telematics is used for pay as you drive (PAYD) or usage-based insurance (UBI), with insurance companies using the telematics system to track real-time behavior of drivers, in order to set an insurance premium amount. It is used to monitor speed, location, and other driving details, such as acceleration habits and instances of hard braking. This helps the insurance companies to understand the risk factors and set the premium amount for insurance accordingly.
Increasing partnerships between automobile manufacturers and telematics service providers is also leading to the use of OEM telematics solutions, with major automobile manufacturers now using built-in, or embedded, telematics solutions. Adoption is also being encouraged by government regulations and mandates, leading to increasing use of aftermarket telematics solutions as well.
The commercial telematics market is expected to experience growth in 2015 due to government regulations such as eCall in Europe and ERA-GLONASS in Russia.
The global commercial telematics market was valued at US$14.67bn in 2013, led by North America, and is anticipated to reach US$46.18bn by 2020, growing at a CAGR of 18% during the forecast period from 2014 to 2020.
