The Golden Age of Telematics
Telematics is an ever expanding and exciting field involving multiple technologies simultaneously working together to collect and present data in a useful manner for cost-savings, process, standard improvements and safety. Telematics has been around for many years, however we are now entering the ‘Golden Age’ of telematics expansion, innovation, and growth.
Increase in OEM Telematics
It is estimated that 15% of all vehicles sold across the world in 2014 were equipped with OEM embedded telematics. This number is expected to grow to 50% of all new vehicles sold by 2020.
Examples of OEM telematics include:
- Roadside Assistance/eCall
- Vehicle Diagnostics
- Stolen Vehicle Tracking
- Usage Based Insurance
- WiFi Hotspot
- Leasing & Rental Fleet Management
- Connected Navigation & Infotainment
- Convenience Applications
- Electronic Road Charging
The number of new cars sold utilizing some sort of telematics is forecasted to increase from 7 million in 2013 to over 68 million in 2020. Embedded telematics systems are expected to grow from 8 million units sold in 2013 to 54 million units by 2020. That’s a Compound Annual Growth Rate (CAGR) of 31%.
Telematics Subscriptions on the Rise
Telematics service subscription numbers are expected to grow at a CAGR of 38%. This means the amount of subscriptions will rise from 16 million in 2013 to 158 million in 2020. In the near future, the global sales of insurance telematics products are projected to grow over 2013 to 2018 at a CAGR of 80%; in 2018 the subscriber base is expected to reach 85.5 million.
Worldwide Growth Potential
The large growth expectation in the telematics market indicates that within the next 10 years, most of the cars on the road will be equipped with some form of telematics. In South Africa, the number of cars with a telematic system is projected to expand to 840,000 by 2017. There is an estimated 90% of the light consumer vehicles market which currently remains untapped. The Chinese telematics market is also expected to increase 22% at the end of 2014 from 2.1 million units to 5.9 million by 2019.
India’s Quickly Growing Telematics Market
The Indian market is projected to grow at a CAGR of 31% (From 2015-2020) and CAGR of 38% (from 2020-2025).
Telematics and the Insurance Industry
A wide range of insurance companies have already begun to incorporate telematics into their policies, taking advantage of the huge data range collected by telematics devices in the following ways:
- Pay As You Drive (PAYD): Monitor where, when and how often a vehicle is being driven. This technology can provide customized policies to suit each individual’s needs. It also can monitor unsafe driving habits and can be used to reward safe driving (deeper discounts, etc).
- Accident Reconstruction: Determine the driver at fault during a car accident, decrease costs related to insurance fraud and gain quicker payouts to those injured
- Vehicle Recovery: Track stolen vehicles for a better chance of quick vehicle recovery.
Check out this blog for further details on insurance discounts related to telematics devices.
Safety Benefits of Telematics Solutions
As telematics continues to advance, the benefits it can potentially provide will become even more significant. Google claims that with its driverless car technology, it will reduce the rate of traffic accidents by 90%, and Volvo claims by 2020 with its new cars it will provide an accident-free driving experience. While these benefits may be years away, telematics technologies offer multiple substantial benefits for fleet vehicles and personal vehicles alike, today.
Telematics is a tool to improve safety, boost employee morale, increase efficiency and add to the bottom line of any business. You do not want to get left behind! Get your fleet vehicles connected with telematics today! Contact us for more details so you can take advantage of the full benefits of telematics today and in the future years to come.
Original Article By: Boby Multani, Senior Technical Services Engineer at Geotab