Market Overview

The domestic market size of telematics insurance for individual drivers is estimated at 262,200 million yen for FY2023. In view of the premiums, telematics insurance comprises 6.1% of the net personal auto insurance. Subscription rate of telematics insurance (the composition ratio of telematics insurance policyholders among entire auto insurance policyholders) is projected to be 8.0% for the same year.

​Telematics insurance is a type of auto insurance that utilizes telematics technology, which provides safe driving support services and premium discounts based on driving information obtained from communication devices installed in automobiles. A range of insurance product has been expanding to meet varying driver needs. For customers that wish to subscribe to telematics insurance using a telecommunication-type drive recorder that wants to drive even safer, telematics insurance with a high-end drive recorder model, such as those with rear cameras as well as front cameras, became an option. For drivers who already have a drive recorder installed, or drivers that want safe driving support services handily, new telematics insurance that links their drive recorder with smartphone has been developed by non-life insurance companies. Propelled by the availability of broader range of products, subscription of telematics insurance is growing steadily.

Noteworthy Topics

Issues at Hand: Improving Recognition & Increasing Insurance Subscribers

It is a common challenge for all insurers to improve the public recognition level of telematics insurance and increase the number of telematics insurance subscriptions.

While a main type of telematics insurance at present is a car insurance using a communication-type drive recorder, whether or not the driver owns a drive recorder, telematics insurance is still not generally recognized by the public. To increase recognition, it is necessary to approach not only to those who do not have a drive recorder, but also to those who already has a drive recorder by appealing the benefits of the drive recorder provided by non-life insurance companies. For example, non-life insurance companies need to appeal to the drivers to buy a drive recorder provided by an insurance company instead of a commercially available drive recorder at the time of replacement.

Non-life insurance companies need to promote telematics insurance regularly via TV commercials and provide support for insurance agencies to encourage making client proposals. These efforts will eventually lead to the expansion of the telematics insurance market.

Future Outlook

The domestic market size of telematics insurance for individual drivers is projected to reach 393,900 million yen for FY2025 and 473,400 million yen for FY2026. Telematics insurance will penetrate steadily, and the subscription rate of telematics insurance is expected to reach 11.9% in FY2025, and 14.2% in FY2026, respectively. That is to say, approximately 10% of the entire automobile insurance policyholders will be the insureds of telematics insurance by FY2025.

Non-life insurance companies are actively promoting telematics insurance through TV commercials to appeal to new car buyers, while also encouraging existing clients to add telematics insurance as an option when renewing their car insurance. These efforts will contribute to stable expansion of the market size.

Research Outline