Telematics is an exciting and ever expanding field that involves numerous technologies working simultaneously to collect and present data in a useful manner for cost-savings realization, as well as process, safety, and standard improvements. Although telematics has been around for several years – we are now entering the “Golden Age” of telematics growth, expansion, and innovation.
Increase in OEM Telematics
Approximately 15% of all vehicles sold worldwide in 2014 were equipped with OEM embedded telematics. This number is expected to increase to 50% of all new vehicles by 2020.
Examples of OEM telematics include eCall/roadside assistance, stolen vehicle tracking, vehicle diagnostics, connected navigation and infotainment, Wi-Fi hotspot, convenience applications, usage-based insurance, leasing and rental fleet management, as well as electronic road charging. The number of new cars sold with head-units utilizing some sort of telematics capabilities is expected to jump from 7 million in 2013 to over 68 million in 2020. Moreover, embedded Telematics Systems are forecasted to grow from 8 Million units in 2013 to 54 Million units by 2020. That’s a CAGR (Compound Annual Growth Rate) of 31%.
Telematics Subscriptions on the Rise
The number of telematics service subscriptions is expected to grow at a CAGR of 38%. This means the number of subscriptions will jump from 16 Million in 2013 to 158 million in 2020. In the more immediate future, global sales of insurance telematics products are projected to grow at a CAGR of 80.20% over 2013-2018, and the subscriber base is expected to reach 85.5 million in 2018.
Worldwide Growth Potential
The expected growth in the telematics market worldwide means that in the next decade, most cars on the road will be equipped with some sort of telematics technology. In South Africa, the number of cars with telematics systems is expected to grow to 840,000 by 2017. An estimated 90% of the (Light Consumer Vehicles) market remains untapped currently. The Chinese telematics market is also forecasted to grow at CAGR of 22.9 percent from 2.1 million units at the end of 2014 to 5.9 million by 2019.
India’s Rapidly Growing Telematics Market
The indian market is expected to grow at a CAGR of 31.2 % (From 2015-2020) and CAGR of 38.3 % (from 2020-2025).
Telematics and the Insurance Industry
Many insurance companies have begun incorporating telematics into their policies, taking advantage of the wide range of data collected by telematics devices in the following ways:
Pay As You Drive (PAYD): Monitor when, where and how often a vehicle is driven. This technology can provide customized policies that suits each individual driver’s needs. It can also monitors risky driving and can be used to reward safe driving (deeper discounts, etc).
Accident Reconstruction: Determine which driver was at fault during accidents, decreasing costs associated with insurance fraud and lead to quicker payouts to injured parties.
Vehicle Recovery: Track stolen vehicles leading to higher chance of quick vehicle recovery.
See this previous blog for further details on insurance discounts related to telematics devices.
Safety Benefits of Telematics Solutions
As telematics technologies continue to evolve, the benefits it can provide will become even more substantial. Google claims that it will reduce the rate of traffic accidents by 90% with its driverless car technology, and Volvo claims that it will provide an accident-free driving experience with its new cars by 2020. While these benefits may be years away, today’s telematics technologies offer numerous tangible benefits for fleet vehicles and personal vehicles alike.
Telematics is a tool to increase efficiency, improve safety, boost employee morale and add to the bottom line of any business. Don’t get left behind! Get your fleet and/or personal vehicles connected today. Contact your local Geotab reseller or Geotab directly for more details so you can utilize the full benefits of telematics today and in the years to come.