UBI Supply Readiness: why insurers hold the main responsibility

Build the stage, and the audience will come

We’ve already looked at UBI demand readiness — the market conditions that make Usage-Based Insurance (UBI) attractive.

But supply readiness – how prepared insurers and the wider ecosystem are to design, price and scale telematics products – often determines whether that potential becomes reality.

PTOLEMUS’ UBI Supply Readiness Index isn’t a random list of economic indicators; it reveals patterns and causal relationships that allow us to draw practical conclusions about where UBI will actually accelerate and why.

What the supply index tells us — and what it implies

The index is built from practical, insurer-side, signals, e.g. loss ratios, maturity of mobile insurance apps, existence of strong TSPs (Telematics Service Providers), and others. Each of those indicators does more than describe capability — together they explain the mechanics of market take-off.

From these metrics we can draw a few robust conclusions:

1. TSP ecosystems turbocharge roll-out — not just enable it. 
Where experienced TSPs exist, insurers move faster from pilots to many concurrent programmes. For example, Italy’s supply leadership is tightly linked to a dense TSP market and many active UBI offers. TSPs reduce integration cost, bring data to speed up the underwriting process, and make feature-rich experiences possible. In short, strong TSPs convert insurer curiosity into operational scale.
2. High loss exposure favours a strong commercial push
. When insurers are squeezed by claims costs, they are materially more likely to invest in telematics. The US and China show that high loss exposure nudges carriers to adopt usage pricing and more aggressive programme roll-out because the economic case is immediate and measurable.
3. Regulators and sandboxes move supply readiness faster than consumer education alone
. Brazil and South Korea illustrate this: early regulatory sandboxes and clear data/pricing rules gave insurers the confidence to test and scale. Conversely, unclear rules around data use or elaborate bonus-malus systems make insurers cautious even in technically ready markets. Regulatory clarity is a supply accelerator, not merely a nice-to-have.
4. A “UBI champion” insurer can kick-start a market even if demand is modest
. History shows single large insurers that back UBI can create market dynamics that others follow. Germany, Japan and South Korea all saw meaningful UBI growth because HUK-Coburg, Tokio Marine and Aioi Nissay Dowa, and Carrot Insurance pushed the market — proving that strong supply leadership can offset weaker structural demand. That’s why supply readiness often trumps demand readiness in terms of short-term impact.
5. Surcharge-free models increase accessibility but may mask immaturity
. Surcharge-free programmes promote opt-in and distribution; but surcharge-free doesn’t always equal commercially mature. Where programmes are widespread but rely on limited discounts or simple engagement features, the market may still be early-stage in analytics and pricing sophistication.

Country examples — reading the index as a story, not a scorecard

Our global UBI Supply Readiness map reveals how the insurance supply in 48 markets is prepared to successfully offer telematics offers. We detail a few country examples below.

• Italy, the global supply leader, has many programmes, strong TSPs, high openness and a healthy share of surcharge-free offers. The country demonstrates how ecosystem maturity produces rich features and customer experience that make UBI a mainstream product.
• The United States’ high supply readiness is driven by numerous programmes, a large TSP presence and strong mobile insurance platforms. The US mix also includes surcharge models, which act as a short term brake to demand, but as a great adjuster for market risks.
• South Korea has a very high supply readiness thanks to insurer openness, regulator support and tech adoption while demand factors (for example, low theft/fraud) are weaker. This shows supply can be ready even when the immediate economic need is smaller; such markets often succeed thanks to specific features and the targeting of specific segments (e.g., young drivers).
• France offers a cautionary contrast — strong demand conditions but insufficient insurer backing, which has held back adoption. High demand alone hasn’t allowed a take-off yet because the supply layer wasn’t mobilised.

A few practical take-aways

UBI supply readiness explains why some “logical” markets don’t take off. If insurers lack the analytics, TSP partners, or regulatory clarity, high consumer interest will not translate into policies.

Maturity is multi-dimensional. A country with many UBI programmes might still be immature if app sophistication, discount design and analytics lag. Conversely, one strong insurer can catalyse a market even if many indicators look middling.

Policy design impacts scalability. Surcharge design, maximum discount levels, and the strength of value added features / services shape not only opt-in rates but the long-term sustainability of programmes.

Our conclusion: Build the stage, and the audience will come.

Supply readiness tells you whether insurers have the will, partners and regulatory comfort to turn latent demand into policies; without it, even highly fertile markets remain under-planted plots. High demand doesn’t automatically equal adoption — but high supply readiness almost always precedes rapid expansion.

Overall insurance companies hold the main responsibility for the transition towards connected insurance, a model where premiums are adjusted to actual risks in near real time; A model where insurers actively work on reducing their customers’ risks rather than wait for the claims to come. Innovation is hard and many insurance CxOs must recognise they have struggled to change their companies… and need help.

Interested to see if your country’s environment is ready for telematics insurance? Check out our latest UBI Global Study here. We provide the global analysis as well as individual evaluations of 48 countries’ markets.

If you are a governmental authority or regulator in charge of the insurance market and wish to foster a stimulating market environment for UBI, feel free to contact us at [email protected].

Article written by Ivo Laniar, under PTOLEMUS copyright