Usage-based Auto Insurance on the Swedish Market: A Case Study

The Swedish consumer market for auto insurance is in a process of transformation from traditional insurance to usage-based insurance (UBI) based on tclematics. The Swedish market can be characterized as having a high level of diffusion and use of digital technologies, yet while auto UBI is well established on several markets internationally it has been struggling on the Swedish. An exploratory case study has been performed covering actors in the Swedish eco system around UBI: incumbent insurance companies, challengers, and technology providers. Interviews have been carried out with key employees and decision makers to understand which opportunities and challenges they perceive in areas ranging from technology to market and how these influence decisions to engage or not to engage in such innovations. The results indicate among other things that national characteristics influence the establishment of auto UBI; the expected technological development creates a window of opportunity preventing incumbents from engaging; the slowly increasing market penetration by UBI offered by challengers will eventually force incumbents to react; although sales of a UBI service is generally not considered profitable for an incumbent they consider or apply different strategies for self-disruption.