Usage-Based Insurance Market Size, Share, Trends, Growth 2032

Usage-Based Insurance Market Insights

According to a report from Zion Market Research, the global Usage-Based Insurance Market was valued at USD 33.27 Billion in 2023 and is projected to hit USD 232.94 Billion by 2032, with a compound annual growth rate (CAGR) of 24.14% during the forecast period 2024-2032.

This report explores market strengths, weakness, opportunities, and threats. It also provides valuable insights into the market's growth drivers, challenges, and the future prospects that may emerge in the Usage-Based Insurance industry over the next decade.

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The report offers valuation and analysis of the usage-based insurance market on a global as well as regional level. The study offers a comprehensive assessment of the industry competition, limitations, sales estimates, avenues, current & emerging trends, and industry-validated market data. The report offers historical data from 2016 to 2018 along with a forecast from 2019 to 2025 based on value (USD Billion).

Usage-Based Insurance Market: Overview

Usage-based insurance offers insurance coverage depending on the total miles a customer covers in a drive along with other driving variables including site, speed, and behavior of the driver. Moreover, UBI depends on telematics instruments for collating automotive-operating information which the insurers or insurance firms can evaluate for determining the charges of insurance policies accurately, examining claims, and restructure collisions for analyzing.

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Usage-Based Insurance Market: Growth Drivers

The usage-based insurance industry is impacted due to an array of factors. Let us discuss a few of them. Connected vehicles such as connected cars have the ability to connect to usage-based insurance systems as well as drivers via smartphones, music players, and other wireless systems in possession of drivers. This will add substantially towards the growth of the usage-based insurance market in the near future.

Smartphone Packages have played a crucial role in the usage-based insurance (UBI) business landscape with drivers eager to access reports pertaining to their driving behaviour & consoles through real-time feedback. Apart from this, a transformation from UBI 1.0 to UBI 3.0 has also witnessed a paradigm shift through mobile data integration with OBDII technology. This is likely to enhance the experience of the drivers along with promoting safe driving, thereby enhancing the market progression over the coming years.

Usage-based insurance has surpassed the boundaries of the conventional insurance model along with the facilitation of driver interaction with the insurer. Through enabling of automotive insurers offering personalized touch points with policy owners, strong customer relationship between vehicle insurers & policy owners is developed. This factor has made notably influenced the growth of the usage-based insurance industry. It has become a need of an hour to set up uniform interoperability standards across various platforms offering telematics access. Moreover, owners such as insurers as well as technology & service providers are required to set up & adhere to these standards. This will not only encompass data standards but also standards for embedded electronic & mechanical features. This will further drive the expansion of the usage-based insurance market over the forecast period.

Insurers are unfurling new opportunities for accruing profits from connected-car ecosystems. A strong connected car ecosystem involved an array of participants like vehicle manufacturers, telecom firms, insurance firms, digital platform behemoths like Amazon & Uber, and sensor & chip manufacturers. Moreover, the emergence of the ecosystem is transforming the competitive scenario for the players across the usage-based insurance sector. Furthermore, the advent of predictive modeling or AI technology has facilitated the real-time data streaming from the connected vehicles and this will alter the structure of the usage-based insurance industry along with facilitating its ascension to new growth horizons.

Some of the major industry players were early accepters of the connectivity tools and derived the benefits of being the first movers in the usage-based insurance industry. For instance, in 2008, Progressive Casualty Insurance Company, a key industry participant, had launched Snapshot – a usage-based insurance program – that offered nearly 30% discount to the drivers based on when & how well they drive their cars. Reportedly, over 3 million persons had signed for the service. Furthermore, car telematics can enhance road safety, play a key role in enhancing driving behavior, and assign insurance premiums through usage-based insurance, thereby enlarging the scope of the car insurance industry. Car telematics also helps in gathering data from automobiles & drivers and transfer them across WANs (wide area networks).  This data will help in improving the claim-processing efficiency, influencing the driving behaviour, and reduce the insurer losses. This will prompt the growth of the usage-based insurance market over the forecast period.

Usage-Based Insurance Market: Report Scope

Usage-Based Insurance Market: Regional Analysis

In the rapidly changing landscape & scenario of the usage-based insurance industry, the passenger vehicle segment is predicted to witness huge growth along with majorly influencing the business growth over 2019-2025. The growth is attributed to a rise in the acceptance of OBD equipment and Blackbox in the passenger cars for checking the vehicle health, distance covered, and driving traits of drivers. Latin America And The Middle East & Africa Combined To Soar Overall Market Growth By 2025. The growth of the markets in these regions over the forecast timeline is attributed to large-scale introduction of insurance telematics schemes in countries like Brazil, South Africa, and Argentina.

Usage-Based Insurance Market: Competitive Analysis

The usage-based insurance market is led by players like:

• Danlaw, Inc
• Allianz SE
• Allstate Insurance Company
• Cambridge Mobile Telematics
• UnipolSai Assicurazioni S.p.A
• Desjardins Group
• Assicurazioni Generali S.P.A
• Liberty Mutual Insurance
• Mapfre
• S.A.
• AXA
• Metromile Inc
• Intelligent Mechatronic Systems Inc
• Octo Technology Nationwide
• State Farm Mutual Automobile Insurance Company
• Insure The Box Limited
• Progressive Casualty Insurance Company
• TomTom International BV
• Sierra Wireless
• Zubie, Inc
• Vodafone Automotive S.p.A.

The global usage-based insurance market is segmented as follows:

By Package

• PHYD
• PAYD
  • Device-based
  • Telematics-based

By Technology

• OBD-II
• Smartphone
• Black Box
• Embedded Telematics

By Vehicle Technology

• Passenger Vehicle
  • OBD-II
  • Smartphone
  • Black Box
  • Embedded Telematics
• Commercial Vehicle
  • OBD-II
  • Smartphone
  • Black Box
  • Embedded Telematics

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa

Our Market Research Study Answers Questions Such As:

• What is the market size of usage-based insurance market?
• What are the major aspects that are likely to create huge impact on the market growth over the forecast timeframe?
• What is the market position of the firm in the global usage-based insurance market and ways as to how the firm can improve it?
•  What type of opportunities or challenges will business rivals face?
• What are the modes of entry for the players in global usage-based insurance business?