The next turn for telematics insurance in Italy

Italy has long led the world in telematics insurance, using connectivity to transform motor insurance into a personalised, data-driven service.

While the market has matured and growth has temporarily slowed, Italy remains a global frontrunner. With almost 9 million telematics insurance policies, it has the highest penetration in the world.

Despite a saturated auto insurance market, several factors, notably a recovery in car thefts and rising claims costs, could help the telematics market find renewed growth, offering insurers new opportunities to balance profitability, risk management, and customer engagement.

A saturated auto insurance market

The Italian automobile insurance market has reached maturity. Car ownership in Italy is the highest in the European Union, at 0.69 vehicle per capita in 2024, while the population declined from 60.7 million in 2015 to 59.0 million in 2023. These factors negatively affect growth for both traditional auto insurance and UBI.

The extensive deployment of telematics in the last 15 years has contributed to a significant reduction in claims and, eventually, premiums. It has helped insurance companies fight against theft and fraud, which were far above the European average.

As one of the countries most heavily impacted by COVID-19 and strict lockdown measures, Italy saw auto insurance premiums decline sharply during the pandemic, driven by a steep drop in accidents. Premium levels have only recently started to recover, and despite modest growth —Gross Written Premiums (GWP) reached €12 billion in 2023, a 4.5% increase —profitability remains under pressure. Loss ratios have risen beyond pre-COVID levels.

To remain competitive in this stagnant environment, insurance companies have been consolidating. Major players such as Allianz, Generali, HDI, AXA, and Intesa Sanpaolo have been acquiring smaller competitors to streamline operations, reduce complexity, and achieve scale efficiencies. This has reduced the number of underwriters offering UBI — from 24 in 2021 to around 17 in 2024 — while the average number of policies per programme has steadily increased to 243,000.

In this context, recovering premiums and the pursuit of lower loss ratios are directly linked to the adoption of telematics. Telematics enables insurers to manage risk more effectively, gain deeper insights into policyholder behavior, and deliver more accurate, personalised pricing—while also helping drivers lower their premiums.

Regional dynamics remain

Premiums vary significantly by region, reflecting risk differences. In Naples, MTPL insurance costs on average €565, while in Bolzano, in the Tyrol region, it costs €196. Black boxes are more common in the south due to higher theft risk, while northern adoption is driven by convenience features, gamification, and crash assistance.

Claims costs rising again

While accident rates remain below historical norms, claims severity has risen, fuelled by higher vehicle repair costs (3.5% CAGR between 2020 and 2024). Italy’s car theft rate — still the highest in the EU — also drives insurer payouts. As a result, black boxes have become a key tool for stolen vehicle recovery. Today, over 8 million black boxes are installed, particularly in southern regions, where professionally fitted devices help mitigate higher theft risks.

Regulation against telematics?

DDL Concorrenza, the 2024 regulation, has mandated data portability, requiring insurers to provide driving data in a format that can be used to obtain discounts from other providers.

For insurers, this could reduce the value of telematics and short-term incentives to invest. However, it may also attract more drivers to telematics and generate richer datasets for long-term analytics, sparking future growth.

In addition, we understand that this regulation, like the previous Monti decree, specifically applies to devices installed in the vehicle, not to smartphone apps.

PAYD vs. PHYD: shifts in UBI models

Pay-As-You-Drive (PAYD) remains the leading UBI model, representing 66% of Italian policies in 2024. However, Pay-How-You-Drive (PHYD) is gaining traction, incentivising safer driving behaviours. Programmes such as Generali’s Immagina Strade Nuove and Unipol’s BeRebel illustrate this shift, showing that behaviour-based pricing can drive growth while reducing claims.

A convergence in mobility services?

Automotive Original Equipment Manufacturers (OEMs) such as Stellantis, Iveco, Toyota, and Renault are exploring UBI, often leveraging embedded telematics systems. Their entry, while still modest, creates competitive pressure for insurers but also highlights opportunities for integrated connected vehicle services including UBI.

In addition, the two market leaders, Unipol and Generali are demonstrating the potential of integration of multiple mobility services. UnipolMove, a unit of Unipol Group, the leading telematic insurer, integrates tolling, parking, fuel, fines, and insurance into a single platform. It reached more than 1 million users in 2024.

Jeniot Next, a new convergent device installed on the windscreen (cf image below) is the combination of a UBI tag and an ETC transponder. It is the result of a partnership between Generali Group’s insurtech arm and Telepass. It is sold by Generali in its Imagine Strade New programme to offer PHYD insurance but also many other services such as eCall, bCall, electronic tolling, find my car, etc.

Making Italian telematics great again?

In 2022, Italy’s telematics market growth entered a slowdown phase, largely influenced by the pandemic. However, the underlying market drivers outlined earlier point toward a renewed growth trajectory in the years ahead. While traditional black box models continue to dominate, smartphone-based and OEM-integrated solutions are steadily gaining traction. New models based on self installable devices are also developing, as Unipol ambitions to also launch a combined ETC-UBI solution by the end of the year.

At the same time, regulatory developments and advancing technology are expected to accelerate the shift toward PHYD policies and alternatives to black boxes.

Rising claims costs and regulatory pressures imply that insurers will need to carefully balance profitability, customer engagement, and technology investment. However, the future will favour insurers who embrace advanced analytics, seamless digital journeys, and multi-functional telematics platforms.

This is what Alberto Busetto, CEO of Generali Jeniot, told us in a recent interview: “The idea is to put as much data-driven processes within each and every policy. We are not coming back from data”.

Programmes that combine behaviour-based pricing, rewards, and convenience are well positioned to capture the next wave of telematics growth in Italy.

To read Alberto Busetto’s full interview and our detailed analysis on the Italian telematics insurance market, just download the 100-page abstract of PTOLEMUS’ UBI Global Study or send a message to [email protected].

Article written by Marco d’Onofrio and Frederic Bruneteau under PTOLEMUS copyright