Gritty, intoxicating Naples—renowned for pizza margherita, football magician Diego Maradona and … connected insurance? Indeed, Napoli has become a proving ground for one of the most promising technology-related opportunities in insurance: the use of sensors for collecting, transmitting and analyzing data on the status of an insured risk.

Connected insurance is starting to pay off for carriers, and they have made the greatest progress in Italy. Consider the following estimates by Bain & Company’s Observatory on Telematics, Connected Insurance & Innovation, a collaboration with the Italian National Association of Insurance Companies (ANIA). About 16% of auto insurance contracts sold and renewed in Italy by the fourth quarter of 2015 featured in-vehicle telematics, with growth outpacing even online insurance sales. Drivers have outfitted their Fiats and Alfa Romeos with 4.8 million black boxes. One insurance group, UnipolSai, has more than one-third of its auto insurance portfolio connected to telematics, and many carriers have been incorporating telematics into their home and health insurance products as well. Penetration has been greatest in places with high premiums, such as Naples, where customers are especially motivated to contain costs.

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