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What are the five most successful companies in the telematics insurance provider space?
Hi! Thank you for your question on the most successful telematics insurance providers. The most useful sources I found to answer your question include corporate websites and an industry report from TU Automotive. In short, the most successful telematics insurance providers include Progressive, State Farm, Allstate, Generali, and Insure The Box. This list was provided by TU Automotive. Revenue information for each company, and specific to telematics policies, was provided when available. Below, you will find a deep dive of my findings.
PROGRESSIVE
Progressive Insurance was established in 1937, and claims to be "fast, fair, and better." Core values of the company include the Golden Rule, respect for all people, and integrity, while the company's overarching objectives are clear communication, excellence, and profit. Progressive offers the Snapshot device, which plug into the car's OBD-II port and analyzes driver behavior.
They do offer customer support after implementation of the Snapshot device, and individuals can call for assistance 24/7, or manage policies online. It is free to enroll in the Snapshot program, and on average, drivers save $150 annually with the device. The average annual premium cost for a Progressive policy is $230-$284.
While revenue figures specific to the Snapshot program are not publicly available, Progressive did note in the 2016 Annual Report that the program enjoyed a 20% growth during the year and over 2 million policies are in place.
Progressive reports using Snapshot data to provide accurate insurance quotes based on specific drive behaviors. The data is encrypted and safeguards are in place to protect the nature of this information. Once sent to the company, the data is then erased from the device. The company states customer data will not be used for revenue-generating purposes, and will only be released under certain conditions, including when it is, "Necessary or appropriate to service your insurance policy, detect or prevent fraud, perform research, or comply with the law."
STATE FARM
State Farm Insurance started in 1938 and is committed to strengthening communities. Core values include quality relationships, mutual trust, integrity, and financial strength. Through the telematics program, State Farm offers a mobile app, which eliminates the need for a device or box that connects to the car. The company reports drivers can save up to 25% by enrolling in the program, which is free. Although enrollment in the actual program is free, it is reported that drivers must also subscribe to OnStar ($200 per year) or SYNC ($60 per year, but only available for Ford vehicles). The average annual premium cost for a State Farm auto policy is $274-$444. While customers can manage accounts online, there are customer service representatives available 24/7 to assist with questions or claims.
State Farm reported an underwriting loss $7.0 billion in 2016 for its auto line. Earned premiums increased, as did incurred expenses related to claims and losses. There is no publicly available data related to revenue specifically from telematics policies, or how many users State Farm has in this program.
State Farm's privacy policy indicates the company does not sell identifiable customer information unless authorized to do so or required to do so by law. This includes data gathered through telematics devices.
ALLSTATE
Established in 1931, Allstate serves more than 16 million American households and focuses on serving and giving back to local communities. It became a publicly traded company in 1993. Drivewise Mobile, a smartphone app, provides drivers an incentive to drive safely. Drivers can get a 3% discount for signing up for the program and earn up to 15% back every 6 months for safe driving. The average price per policy is $386-$474. Customers have access to 24/7 customer service via telephone and online after enrollment in any Allstate program.
Allstate's net income was $2.1 billion in 2015. The year also saw a 4.2% increase in net written policies. There were 1 million Drivewise users by the end of 2015.
In 2015, Allstate disclosed plans to sell anonymous customer driving data to boost revenues. In 2015, Arity was launched. Arity is an independent telematics arm of the company that sells analytics products and data to third-parties.
GENERALI
In existence for almost 200 years, Generali has a presence in 60 countries. The company utilizes MyDrive Solutions, a telematics program designed to assess individual driver risk and individualize insurance premiums based on gathered data. In 2015, Generali fully acquired MyDrive. Customer service is not as easily accessible as for other companies. MyDrive's website offers a form that can be completed by customers, which will be responded to at the company's convenience. The Generali website is just as obscure, with no contact information for customer service readily offered. I was not able to locate any information regarding an average price paid for policies.
The net profit in 2015 for Generali Group was over 2 billion Euro. Generali/Genertel wrote 329.3€ million in auto policies in 2015. Currently, 33% of new insurance policies written by Generali include telematics products. This means the company generated a revenue in 2015 of approximately 108.67€ million from telematic policies.
As part of the company's privacy policy, personal data is not disseminated to third parties. This includes data received through telematics practices.
INSURE THE BOX
Established in 2010, Insure The Box is a telematics-based insurance company that has grown from 20 employees to over 300 employees. Black boxes are placed into the cars of customers to measure driver behaviors, and insurance premiums are adjusted accordingly. The average cost of an insurance policy is £1,411. This has been calculated based on the fact that most drivers report receiving a 17% decrease in premium cost at renewal, equaling £240 (£240 / 17% = £1,411). The average cost for policies for young drivers is £800; however, 95% of customers aged 18-25 report a 34% price decrease at renewal. As part of its customer service, Insure The Box offers "Accident Alert," which alerts the insurance company when the black box detects a significant impact. They also offer an online help center where customers can access answers to frequently asked questions, as well as live chat and 24/7 claim submission.
In 2016, the company saw revenue of £120 million, which is up from its first year revenue of £8 million. Over 3 billion miles of driving data was accumulated in 2016, as well. Insure The Box accounts for two-thirds of the U.K. telematics insurance market, selling approximately 7,000 new policies each month.
Insure The Box states they will only utilize personal data in accordance with policy management, and will not sell data in order to generate revenue.
CONCLUSION
To wrap it up, telematics insurance providers utilize programs and technology designed to analyse driver behaviors and create individualized insurance premiums according to this data. The top 5 carriers, according to TU Automotive, include Progressive, State Farm, Allstate, Generali, and Insure The Box.
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