According to a new research report from the analyst firm, the number of insurance telematics policies in force on the European market reached 5.3 million in Q4-2015. Growing at a compound annual growth rate (CAGR) of 37.2%, this number is expected to reach 25.8 million by 2020.

In North America, the number of insurance telematics policies in force is expected to grow at a CAGR of 45.8% from 6.3 million in Q4-2015 to reach 42.1 million in 2020.

In North America, smartphone based solutions are growing rapidly whereas Europe still largely favours device-based solutions.

Jonas Wennermark, IoT/M2M Analyst at Berg Insight, said Canada, the US and Italy in particular have seen a significant increase in the use of telematics-based auto insurance during 2015.

He added that the UK is also one of the front-runners and that uptake is expected to increase in a number of additional countries in the coming years. Telematics-based insurance has already been introduced in a number of European countries including Spain, Austria, France, Switzerland, Germany, Denmark, Belgium and the Netherlands.

In the future, Berg Insight predicts differentiated telematics offerings for a broader range of segments, and insurers are increasingly expected to embrace usage-based pricing as well as claims-related insurance telematics and various value-added services.

“We are also seeing a growing involvement from OEMs. Progressive and OnStar are about to launch what might become the first major PHYD offer using OEM data. There are also recent attempts to share OEM data through intermediaries such as Verisk and the Floow,” concluded Mr Wennermark.