Global Usage-Based Insurance Market - Industry Trends and Forecast to 2031

Usage-Based Insurance Market Analysis and Size

Fleet management utilizes the capabilities of the usage-based insurance (UBI) market to monitor and analyze the driving behavior of vehicles within a fleet. Integrated UBI technology allows fleet managers to track factors such as mileage, speed, braking patterns, and vehicle usage in real-time. This data enables optimization of routes, improvement of fuel efficiency, and enhancement of overall safety by identifying and addressing risky driving behaviors.

Global usage-based insurance market size was valued at USD 31.45 billion in 2023 and is projected to reach USD 208.32 billion by 2031, with a CAGR of 26.66% during the forecast period of 2024 to 2031. In addition to the market insights such as market value, growth rate, market segments, geographical coverage, market players, and market scenario, the market report curated by the Data Bridge Market Research team includes in-depth expert analysis, import/export analysis, pricing analysis, production consumption analysis, and pestle analysis.

Report Scope and Market Segmentation

Market Definition

Usage-based insurance (UBI) is a type of auto insurance where premiums are determined based on individual driving behavior rather than traditional factors such as age or location. It typically involves the use of telematics devices or smartphone apps to track data such as mileage, speed, braking patterns, and time of day of driving. Insurers analyze this data to assess risk levels and adjust premiums accordingly, offering potential discounts for safer driving habits. UBI aims to incentivize and reward drivers for responsible behavior while providing more personalized and potentially cost-effective insurance coverage.

Usage-Based Insurance Market Dynamics

Drivers

• Rising Advancements in Telematics Technology Enables more Comprehensive Monitoring

Telematics technology advancements encompass sophisticated sensors, GPS tracking, accelerometers, and onboard diagnostics, which collectively provide detailed insights into factors such as speed, mileage, braking patterns, and time of driving. With such granular data, insurers can accurately assess risk profiles and tailor premiums accordingly, fostering a shift towards personalized insurance offerings. Furthermore, the evolution of telematics facilitates the seamless integration of UBI programs into vehicles, smartphones, and other devices, enhancing accessibility and usability for both insurers and policyholders.

• Growing Consumer Demand for Personalization Increases the Demand for UBI Models

Modern consumers increasingly seek insurance solutions tailored to their specific needs and behaviors rather than one-size-fits-all approaches. UBI meets this demand by offering personalized premiums based on individual driving habits, such as mileage, speed, and braking patterns, collected through telematics technology. This level of customization empowers consumers to have greater control over incentivizes safer driving practices to potentially lower premiums. As a result, insurers are motivated to adopt UBI models to meet the evolving preferences of consumers and remain competitive in the market.

Opportunities

• Growing Regulatory Initiatives Increases the Adoption of UBI Models

Government mandates promoting safer driving practices often include incentives such as discounts or reduced premiums for drivers who participate in UBI programs. Regulatory bodies may encourage insurers to offer UBI options through policies aimed at reducing road accidents and improving overall traffic safety. These initiatives incentivize insurers to invest in UBI technology and motivate consumers to embrace usage-based insurance promoting responsible driving behavior. As a result, regulatory support plays a pivotal role in fostering the growth and expansion of the UBI market.

• Rising Competitive Pressure Fosters Continuous Improvement in UBI Technology

As competitors introduce UBI programs, insurers are motivated to follow suit to remain competitive. This pressure fosters continuous improvement in UBI technology and service offerings, leading to advancements in data analytics, telematics, and customer engagement strategies. Insurers strive to attract and retain customers by offering more personalized and cost-effective insurance options through UBI, driving market growth. Competition encourages insurers to optimize their UBI programs, refining pricing models and incentive structures to better align with customer needs and preferences.

Restraints/Challenges

• Increased Privacy Concerns among the UBI Technology Consumers

Increased privacy concerns among consumers regarding UBI technology present a significant restraint in the usage-based insurance (UBI) market. As UBI relies on collecting and analyzing personal driving data, consumers may express apprehension about potential privacy breaches or unauthorized access to their information. This concern can deter individuals from participating in UBI programs, leading to slower adoption rates and limiting the market potential for insurers.

• Disparities in Technological Literacy Limits the Adoption of UBI Technology

Some drivers lack access to the necessary technology, such as telematics devices or smartphones with compatible apps, to participate in UBI programs. This digital divide hampers market penetration and excludes certain demographic segments from accessing potential cost-saving benefits. Disparities in technological literacy and access exacerbate the challenge, further hindering the UBI market's ability to reach its full potential and offer personalized insurance solutions to a broader audience.

This market report provides details of new recent developments, trade regulations, import-export analysis, production analysis, value chain optimization, market share, impact of domestic and localized market players, analyses opportunities in terms of emerging revenue pockets, changes in market regulations, strategic market growth analysis, market size, category market growths, application niches and dominance, product approvals, product launches, geographic expansions, technological innovations in the market. To gain more info on the market contact Data Bridge Market Research for an Analyst Brief, our team will help you take an informed market decision to achieve market growth.

Recent Developments

• In 2021, The Progressive Corporation entered into a definitive agreement to acquire all outstanding shares of Protective Insurance Corporation, a move intended to expand Progressive's market presence and offerings
• In 2020, Progressive Corporation launched Snapshot ProView, an optional usage-based insurance (UBI) and fleet management program tailored for small business owners. This initiative became integrated into Smart Haul, Progressive's UBI program for truckers, utilizing Electronic Logging Device (ELD) data to incentivize safe driving practices
• In 2020, Lyft collaborated with Liberty Mutual Insurance to provide insurance coverage to drivers using its ride-sharing platforms across Arizona, Michigan, New Mexico, Texas, and Utah. This program ensures specific insurance protections for drivers from the moment they activate their Lyft app until they finish their rides

Usage-Based Insurance Market Scope

The market is segmented on the basis of vehicle type, package type, device offering, technology, vehicle age, and electric and hybrid vehicle type. The growth amongst these segments will help you analyze meagre growth segments in the industries and provide the users with a valuable market overview and market insights to help them make strategic decisions for identifying core market applications.

Vehicle Type

• Passenger Car
• Light-Duty Vehicle (LDV)
• Commercial Vehicle
• Heavy-Duty Vehicle (HDV)

Package Type

• Pay-As-You-Drive (PAYD)
• Pay-How-You-Drive (PHYD)
• Manage-How-You-Drive (MHYD)

Device Offering

• Company Provided
• Bring Your Own Device (BYOD)

Technology

• OBD-II
• Smartphone
• Embedded System
• Black Box
• Others
• Hybrid
• Metal Forming Market for Automotive

Vehicle Age

• New Vehicles
• On-Road Vehicles
• Old Vehicle

Electric and Hybrid Vehicle Type

• Hybrid Electric Vehicle (HEV)
• Plug-In Hybrid Vehicle (PHEV)
• Battery Electric Vehicle (BEV)

Usage-Based Insurance Market Analysis/Insights

The market is analysed and market size insights and trends are provided by country, vehicle type, package type, device offering, technology, vehicle age, and electric and hybrid vehicle type as referenced above.

The countries covered in the market report are U.S., Canada and Mexico in North America, Germany, France, U.K., Netherlands, Switzerland, Belgium, Russia, Italy, Spain, Turkey, Rest of Europe in Europe, China, Japan, India, South Korea, Singapore, Malaysia, Australia, Thailand, Indonesia, Philippines, Rest of Asia-Pacific (APAC) in the Asia-Pacific (APAC), Saudi Arabia, U.A.E, South Africa, Egypt, Israel, Rest of Middle East and Africa (MEA) as a part of Middle East and Africa (MEA), Brazil, Argentina and Rest of South America as part of South America.

The Asia-Pacific dominates in the market owing to several factors. Heightened consumer awareness drives demand for personalized insurance solutions and the booming automobile industry fuels UBI adoption, aligning with the region's economic growth. Additionally, a shift towards remote diagnostic technology enhances UBI feasibility and efficiency. The proliferation of connected cars facilitates the integration of innovative UBI models, catalyzing further market expansion in the region.

North America is expected to grow in the market, primarily driven by its advanced telematics infrastructure, widespread smartphone adoption, and the active engagement of leading insurance companies in offering UBI services. These factors create an environment conducive to the growth of UBI, enabling insurers to leverage data from connected devices to offer personalized premiums based on driving behavior. With these advantages, North America is expected to maintain its dominance in UBI implementation and adoption.

The country section of the report also provides individual market impacting factors and changes in regulation in the market domestically that impacts the current and future trends of the market. Data points such as down-stream and upstream value chain analysis, technical trends and porter's five forces analysis, case studies are some of the pointers used to forecast the market scenario for individual countries. Also, the presence and availability of global brands and their challenges faced due to large or scarce competition from local and domestic brands, impact of domestic tariffs and trade routes are considered while providing forecast analysis of the country data.   

Competitive Landscape and Usage-Based Insurance Market Share Analysis

The market competitive landscape provides details by competitor. Details included are company overview, company financials, revenue generated, market potential, investment in research and development, new market initiatives, global presence, production sites and facilities, production capacities, company strengths and weaknesses, product launch, product width and breadth, application dominance. The above data points provided are only related to the companies' focus related to market.

Some of the major players operating in the market are:

• Cambridge Mobile Telematics (U.S.)
• insurethebox  (U.K.)
• Progressive Casualty Insurance Company (U.S.)
• Modus Group, LLC.(U.S.)
• Inseego Corp. (U.S.)
• Lemonade Inc. Metromile (U.S.)
• The Floow Limited (U.K.)
• Allstate Insurance Company (U.S.)
• Octo Group S.p.A (Italy)
• TomTom International BV.  (Netherlands)
• UNIPOLSAI ASSICURAZIONI S.P.A. (Italy)
• Liberty Mutual Insurance (U.S.)
• Equitable Holdings, Inc.(Italy)
• MAPFRE (Spain)
• Sierra Wireless (Canada)
• Verizon (U.S.)
• Allianz Partners  (Germany)

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