Wednesday, October 17, 2018

UBI Gaining Prominence Among Auto Insurers


UBI, which allows insurance providers to vary premiums depending on the behavior of consumers, is gaining traction amongst auto insurers. In particular it is used in vehicle insurance based on the vehicle usage and driving behavior of drivers. The popularity of UBI is driven by the increased use of smartphones with features such as Global Positioning System (GPS), accelerometers and g-force tracking, which can be used to substitute telematics devices with mobile apps. Under UBI, auto insurers are offering pay as you drive (PAYD) and pay how you drive (PHYD) services. While PAYD insurance premium is calculated based on the distance covered by a vehicle, PHYD insurance premium is calculated based on the driving behavior of insured consumers. UBI is rapidly growing in regions such as Europe, Asia and America. According to a report by EY, global market penetration of UBI services is expected to increase from about 1% in 2015 to 15% by 2020.

THE BUSINESS RESEARCH COMPANY EXPECTS THE INSURANCE PROVIDERS GLOBAL MARKET TO GROW TO $5.4 TRILLION BY 2021
Asia Pacific was the largest region in the insurance providers market in 2017, accounting for $1.6 trillion or more than one-third of the market share.

The chart below shows the year-on-year growth of the global insurance providers market during 2017– 2021


According to The Business Research Company’s Consultant, Nitin Gianchandani, peer-to-peer insurance is gradually gaining prominence both in emerging and developed markets. This growth is expected to be driven by reduced cost of premium in emerging countries resulting from improved internet penetration in such regions. Peer-to-peer insurance is based on pooling insurance premiums of participating individuals that can be used to compensate future uncertain losses and share the left-over amount among participants. It aims to reduce premium and overhead costs when compared to traditional Insurance Providers, decrease inefficiencies and increase transparency of businesses.


UnitedHealth Group was the largest player in the insurance providers market in 2017, with revenues of $144 billion in 2017. UnitedHealth‘s growth strategy aims at expanding its health care insurance business by acquiring companies in similar industries. In 2017, the company acquired Banmedica S.A., a Chile based private health insurance company. In 2016, the company acquired Rocky Mountain Health Plans, Colorado based Health Insurance Company and Symphonix Health Insurance Inc., an Illinois based health insurance provider for the senior citizens.

The insurance providers industry comprises establishments engaged in underwriting (assuming the risk and assigning premiums) annuities and insurance policies. Insurance Providers invest premiums to build up a portfolio of financial assets to be used against future claims. Direct insurance providers are entities that are engaged in primary underwriting and assuming the risk of annuities and insurance policies. Reinsurance providers are companies that are engaged in assuming all or part of the risk associated with an existing insurance policy or set of policies, originally underwritten by another insurance carrier (direct insurance carrier). This report excludes the reinsurance providers market.

Insurance Providers Global Market Report 2018 is a detailed report giving a unique insight into this market. The report is priced at $4000 for an individual user. To use across your office, the price is $6000 and $8000 if you wish to use across a multinational company.

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