Published: June 8, 2016 | London, UK
Technavio has published its latest report on the global motor vehicle insurance market, which provides an analysis on the most important trends expected to impact the market outlook from 2016-2020. It is an emerging trend as a factor that has the potential to significantly impact the market and contribute to its growth or decline.
According to the National Insurance Crime Bureau (NICB), insurance fraud is the second biggest white-collar crime in the US after tax evasion. Advanced tools, such as big data analytics and geospatial analysis, are making it easier for insurance companies to reduce losses stemming from fraud claim. Technavio expects top insurers to form partnerships with analytics services providers to speed up payment processes and improve customer satisfaction during the forecast period.
Bharath Kanniappan, a lead research analyst at Technavio, said:
Currently, insurance companies are examining patterns in claim historical and industry data to identify common frauds. Advanced analytics tools such as social media analytics and text mining will fasten the process of drawing inferences from unstructured data and will help to identify fraudulent claims accurately in the coming years.
The companies that are offering non-life insurance, including motor vehicles, have started offering several add-on covers. This is because customers are not satisfied with plain-vanilla policies and demand features such as zero depreciation motor insurance cover, return to invoice cover, and enhanced personal accident and hospitalization coverage. Top vendors are also offering innovative covers that are inclusive of all vehicle models.
Telematics insurance, where a telematics or a black box is fitted in passenger or freight vehicles, is gaining popularity in developing and the developed countries. Motor insurance in the modern day is not considered comprehensive in the absence of telematics insurance.
When a person buys a telematics insurance policy, the company fixes a telematics box that contains a SIM card in the vehicle. Using the data transmitted by the box, the insurer can review the driver’s on-road behavior and help him or her improve their driving skills. Some insurers offer bonus points to buyers that drive safe and such points can be redeemed during policy renewal.
The usage-based telematics insurance offered are PAYD, PHYD, and pay-per-mile. Telematics insurance policies also help police forces to track the vehicle in case of theft; help identify any safety concern; and offer information needed for crash forensics. Therefore, we expect telematics insurance to trigger a paradigm shift in terms of improved portfolio management during the forecast period.