Telematics use growing globally, despite some driver concerns
Everyone around the world is not necessarily impressed by telematics, according to GlobalData.
Telematics implementation is steadily growing across the globe, not everyone is impressed by these advancements. According to GlobalData, a recent survey showed that drivers under 30 in the U.K. have some pressing concerns about the technology.
When asked what would keep them from purchasing a telematics or usage-based auto insurance policy, 31% of those surveyed said they were put off by needing a device or phone in order to connect with their insurer; 27.3% said they were uneasy with their driving ability being graded; and 17.3% cited privacy concerns.
“Given younger consumers’ considerable online presence, it is perhaps surprising that they find the idea of data sharing and privacy to be such sticking points when it comes to telematics,” Benjamin Hatton, insurance analyst at GlobalData said in a release. “Advertising the potential financial savings black boxes and usage-based products can provide may go some way to addressing these concerns. However, there also needs to be a reassurance that these services are intended to help young drivers, rather than acting as a Big Brother that’s constantly watching for errors.”
Despite some drivers’ concerns, about 62% of all new cars sold in 2020 were equipped with an original equipment manufacturer (OEM) embedded telematics system, according to the Global Automotive OEM Telematics Market Report 2021.
The report also explains that initiatives in the EU and Russia that have made automatic emergency call features a mandatory safety feature in new cars have helped drive adoption percentages. They estimate 41.1 million OEM telematics units were shipped worldwide in 2020, which they expect could grow to as many as 76.9 million units shipped in 2026.
In places like the U.K., advanced network speeds have also contributed to the growing standardization of telematics.
“The rollout of 5G networks across the UK will further facilitate mobile telematics,” Hatton said in GlobalData’s release. “Moving to mobile will also remove installation costs, meaning the services are both more accessible and more affordable.”
“Telematics can unlock discounts for good drivers, which could help young drivers who are subject to considerably greater average premiums for their car insurance,” he continued. “This will become especially important as the cost-of-living crisis continues.”