Auto insurance industry and InsurTechs can learn from telematics in Italy
Matteo Carbone, Principal at Bain & Company in Italy, reflects on how InsurTechs can learn from the experiences the Italian auto insurance industry has gained from its use of telematics.
The insurance sector is becoming more innovative. Various initiatives and projects launched around the globe are proof of that: from the classic “call for ideas” and corporate venture capital to innovation labs and accelerators that involve the largest insurance companies. According to CB Insights, InsurTech—which involves rethinking one or more steps of the insurance value chain through the use of technology—received $650 million in funding in the first quarter of 2016, and the number of transactions more than doubled compared with the same period in 2015.
The Italian insurance sector represents an interesting case history about InsurTech. Italy has the most advanced experience in combining the car insurance contract with hardware (the black box) and using that data throughout the insurance value chain. According to the Connected Insurance & Innovation Observatory – a think tank that Bain & Company developed with ANIA, AIBA and other insurance and non-insurance partners to help spread innovation culture in the insurance sector – telematics penetration reached 16% of all cars insured in Italy by the last quarter of 2015.