Smart Insurance Market (UBI) in Russia and the World

April 2018

Analytical Report (full version)

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Analytical Report (full version)

Smart Insurance Market (UBI) in Russia and the World
Smart Insurance Market (UBI) in Russia and the World
April 2018

Smart Insurance Market (UBI) in Russia and the World

April 2018

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The Russian market for smart insurance is in its infancy. J'son & Partners Consulting estimates that by the end of 2017, the penetration of smart car insurance in Russia will be not more than 3% (of the number of active hull insurance policies), the main growth of the Usage Based Insurance (UBI) segment is expected after 2018 based on the use of built-in telematics solutions "ERA-GLONASS"and products of automakers.


Telematic solutions in car insurance


The auto insurance market is undergoing major changes. A traditional insurance model based on risk assessment, which takes into account the demographic characteristics of the driver, such as gender, age, solvency, driving experience, is replaced by a new insurance model, where the risk is calculated according to the individual driving style of each client. This type of insurance is called "smart" insurance or "Usage-Based Insurance (UBI), which helps drivers reduce insurance premium costs, monitor their driving safety, and insurance companies more accurately and effectively calculate the cost of insurance contribution, assessing the risk with minimal errors, and reduce the number of accidents.


"Smart" insurance helps drivers to reduce the cost of insurance premiums, destroying stereotypes about the style of driving, depending on socio-demographic characteristics. For insurance companies, a departure from the traditional model will allow more accurate and effective calculation of the cost of the insurance premium, assessing the risk with minimal errors.


Among the main advantages of "smart" insurance for insurance companies:

• Acquisition of competitive advantages, increasing customer loyalty and satisfaction with services;

• Improving operational efficiency;

• Minimization of insurance fraud


The main advantages of "smart" insurance for customers / purchasers of an insurance policy:

• Economic benefit and increase of own safety;

• Multifunctionality of telematics equipment.


From the technological point of view, one of the main elements of the smart car insurance system is the telematics module. This equipment collects information about the style of driving by measuring the speed of movement, the angle and sharpness of maneuvers and other parameters. The received information is stored in the company's database, on the basis of which a decision is made on the price of the insurance policy.


The entire range of existing telematics modules used for "smart" car insurance can be divided into the following types:

• devices connected to the diagnostic connector of the car (OBD-dongles);

• telematic modules built in by the vehicle manufacturer (OEM);

• modules reacting to windshield vibration (windscreen);

• Smartphones (some modern smartphone models in combination with specialized applications can be used as stand-alone telematics modules);

• "Black boxes" (this concept includes all types of telematic modules installed in the vehicle, which do not belong to the above).


The largest share of devices in the segment of insurance telematics in the world belongs to OBD-dongles (in 2016, according to Ptolemus Consulting Group - 56%).


The world market of smart insurance


According to Berg Insight, in 2015 in Europe and North America there were 11.6 million smart insurance policies (5.3 million in Europe and 6.3 million in North America), in 2015-20. European and North American markets reached 25.8 million and 42.1 million, respectively.


Players of the smart insurance market


The chain of creation of the value of the smart insurance policy covers several industries: insurance companies, telematics equipment providers in the insurance sector, mobile operators, and car manufacturers.

Insurance companies interact with all links in the value chain and are closest to the final consumer. They work closely with telematics equipment providers in the insurance industry, both directly and through mobile operators.


Insurance companies

In the world: Progressive, Allstate Corporation, Liberty Mutual и др.

In Russia: «Alfastrahovanie», «Ingosstrah », «Liberti Strahovanie » and others.


Telematic Service Providers (TSP, Telematics Service Provider)

In Russia: 3S-Telematica, SpaceTeam и др.


Technology Providers (TTP, Telematics Technology Provider)

In the world: Meta System, Xirgo и Danlaw и др.


Mobile operators

In the world: Telefónica, Verizon и др.

In Russia: MTS, VympelKom.


Manufacturers of cars

In the world: BMW, Fiat, Citroen, Renault-Nissan и др.


Russian Smart Insurance Market


The growth of the Russian smart insurance market is characterized by a slow pace, which is due to the unfavorable economic situation, which caused a decline in the Russian car hull market in 2016, both in kind and in value terms. In 2017, the negative dynamics was overcome, but at the same time there was a decrease in the average auto insurance premium and the total volume of premiums.


Participants in the insurance market are forced to look for new ways of development, optimizing costs and improving profitability. A significant impetus for the smart insurance market can be the use of modernized ERA-GLONASS terminals and built-in solutions from automakers, and the active use of mobile applications that replace OBD-dongles, black boxes and other telematic devices.


In the perspective of 5 years, the penetration of "smart" policies in the aftermarket segment can reach 350 thousand (not more than 10% of the number of active hull policy), but through the use of built-in telematics solutions based on ERA-GLONASS (including in the mandatory segment insurance) - 3.25 million.


Among drivers of growth of the market of "smart" insurance:


• Ability to provide additional services, for example, anti-theft, E-Call, B-Call and other value-added services;

• The overall worldwide trend towards an increase in the number of implemented telematics solutions in car insurance.


J'son & Partners Consulting refers to the main barriers to the development of the smart insurance market in Russia:


• Waiver of any type of voluntary insurance due to a decrease in disposable income;

• Conservativeness of policyholders, distrust of insurance companies, fears of lack of confidentiality of data.


This information note was prepared by the J'son & Partners Consulting. We work hard to provide factual and prognostic data that fully reflect the situation and available at the time of release. J'son & Partners Consulting reserves the right to revise the data after publication of new official information by individual players. 


Copyright © 2017, J'son & Partners Consulting. The media can use the text, graphics and data contained in this market review only using a link to the source of information - J'son & Partners Consulting or with an active link to the JSON.TV portal

™ J'son & Partners [registered trademark] 



Detailed results of the research are presented in the full version of the report


"Main trends and prospects for the development of the smart insurance market (UBI) in Russia and in the world"



1. The role of telematics solutions in car insurance

1.1. Existing technological solutions

1.2. Advantages of smart car insurance

2. Overview of the foreign smart insurance market

3. The main participants of the world market of smart insurance

3.1. Insurance companies

3.1.1. Progressive

3.1.2. Allstate Corporation

3.1.3. Liberty Mutual

3.1.4. Company 4

3.1.5. Company 5

3.1.6. Company 6

3.1.7. Company 7

3.1.8. Company 8

3.1.9. Company 9

3.1.10. Company 10

3.2. TSP (Telematics Service Provider)

3.2.1. Octo Telematics

3.2.2. Company 2

3.2.3. Company 3

3.3. TTP (Telematics Technology Provider)

3.3.1. Meta System

3.3.2. Company 2

3.3.3. Company 3

3.4. Mobile operators

4. An estimation of the Russian market of "smart" autoinsurance, the forecast till 2022.

4.1. The Russian motor insurance market

4.1.1. In physical terms

4.1.2. In monetary terms

4.2. The Russian market of smart auto insurance

4.2.1. In physical terms

4.2.2. In monetary terms

4.3. Profiles of main players

4.3.1. Insurance companies «Alfastrahovanie» «Ingosstrah» «Liberti Strahovanie» Company 4 Company 5 Company 6 Company 7 Company 8 Company 9 Company 10 Company 11 Company 12 Company 13 Company 14 Company 15 Company 16 Company 17

4.3.2. Telematic providers and technology partners Meta System «R-Telematics» 3S-Telematica Company 4 Company 5 Company 6

4.3.3. Cellular Operators VimpelCom MTS

5. Drivers and barriers to the development of the smart insurance market in Russia


Application. List of companies mentioned in the report


List of figures

Fig. 1. Examples of the appearance of telematic devices

Fig. 2. Shares of various devices in the segment of insurance telematics in the world,

Fig. 3. Basic advantages of smart insurance

Fig. 4. Penetration of "smart" insurance services in some countries and regions of the world, June 2016.

Fig. 5. Growth rates of the "smart" insurance market in some countries, June 2016.

Fig. 6. Active policies of "smart" insurance in Europe and North America, million policies, 2015-2020.

Fig. 7. World market of "smart" insurance in the regional context, million policies, 1Q.2016.

Fig. 8. Active policies of "smart" insurance in some countries, million policies, 2015-2023.

Fig. 9. Parterre companies Movitrack Viasat

Fig. 10. Components of the DriveWell program

Fig. 11. The Ecosystem of DataLogger

Fig.12. Advantages of solutions for smart insurance from Verizon

Fig.13. Scheme of interaction of Telefonica in the implementation of M2M solutions, including solutions for "smart" insurance

Fig.14. The number of concluded agreements on voluntary insurance of land transport means (except for railway transport means) - auto hull, pieces, 2015-2017.

Fig.15. The volume of insurance premiums for land transport insurance (other than rail transport) in Russia - auto hull, million rubles, 2015-2017.

Fig.16. Forecast of the volume of auto insurance premiums, billion rubles., 2015-2021.

Fig.17. The forecast of the market of "smart" auto insurance in Russia in physical terms, thousand policies, 2016-2022.

Fig.18. The market of "smart" auto insurance in Russia in monetary terms, billion rubles., 2016-2022.

Fig.19. The average premium of "smart" CASCO in Russia, thousand rubles., 2016-2022.


List of Tables

Table. 1. The number of installations of mobile applications of insurance telematics on Google Play