What are the Historical Developments and Current Growth Metrics of the Usage-Based Insurance Market?
The usage-based insurance market has seen considerable growth due to a variety of factors.
• The market size for usage-based insurance has experienced significant growth in the recent past. Its value is projected to rise from $63.07 billion in 2024 to $83.11 billion in 2025, indicating a compound annual growth rate (CAGR) of 31.8%.
This substantial growth during the historic period is due to several factors, including increasing vehicle ownership, escalating instances of vehicle theft, a solid demand for passenger car sales, and a widespread adoption of connected cars.
How Will the Usage-Based Insurance Market Size Evolve over the Forecast Period?
The usage-based insurance market is expected to maintain its strong growth trajectory in upcoming years.
• In the coming years, the market size of usage-based insurance is predicted to experience a substantial surge, ballooning to $211.86 billion in 2029 with a compound annual growth rate (CAGR) of 26.4%.
Factors contributing to the growth forecast include an expanding automotive industry, a rising demand for electric vehicles, escalating concerns about vehicle safety, and a swift increase in the application of usage-based insurance by insurers to enhance their profitability. The forecast period is likely to witness significant trends such as an emphasis on connected technologies, smartphone technology-based telematics platforms, and telematics technology, along with a focus on partnerships, collaborations, and self-installed telematics devices.
What Are the Critical Driver Fuelling the Usage-Based Insurance Market's Growth?
The surge in the automobile sector is projected to fuel the rise of the usage-based insurance market in the future. The automotive sector encompasses a wide array of businesses and bodies engaged in varied activities like designing, developing, promoting, and selling vehicles. Vehicle owners are showing interest in usage-based insurance, facilitated by telematics, as it offers lower premiums for safer driving and higher premiums for riskier driving. This implies that by improving their driving behaviors, people can substantially cut down their insurance costs. For instance, the Organisation Internationale des Constructeurs d'Automobiles (OICA), a French international association of vehicle makers, reported a substantial growth in the global automotive industry in 2023. The total vehicle production in this year reached 93546599 units, a marked rise from the 85016728 units manufactured in 2022. Accordingly, the expansion in the automotive industry propels the development of the usage-based insurance market.
What Key Areas Define The Segmentation Of The Global Usage-Based Insurance Market?
The usage-based insurance market covered in this report is segmented –
1) By Vehicle Type: Light-Duty Vehicle (LDV), Heavy-Duty Vehicle (HDV)
2) By Technology: On-Board Diagnostic (OBD)-II-Based UBI Programs, Smartphone-Based UBI Programs, Black-Box-Based UBI Programs, Other Technologies
3) By Package Type: Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), Manage-How-You-Drive (MHYD)
Subsegments:
1) By Light-Duty Vehicle (LDV): Passenger Cars, SUVs, Light Trucks
2) By Heavy-Duty Vehicle (HDV): Buses, Heavy Trucks, Commercial Vehicles
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How Are Emerging Trends Reshaping The Dynamics Of The Usage-Based Insurance Market Size?
Firms operating in the usage-based insurance sector are making significant investments in connected technologies. This type of technology allows devices and systems to be linked via the internet. The primary focus of these companies is to leverage connected technologies to enhance their products and services. For example, in April 2022, a British car insurance start-up called By Miles, launched the By Miles Connect platform. This platform enables connected car owners to establish a direct link between their insurance policies and the company from their vehicle. The platform calculates insurance rates based on the distance traveled, data which it collects directly via a cloud platform installed in the vehicle.
Who Are the Key Players in the Usage-Based Insurance Market?
Major companies operating in the usage-based insurance market include:
• Progressive Corporation
• Allstate Corporation
• UNIPOLSAI ASSICURAZIONI S.P.A
• Allianz SE
• Liberty Mutual Insurance
• AXA
• Mapfre S.A.
• State Farm Mutual Automobile Insurance Company
• American International Group. Inc
• Nationwide Mutual Insurance Company
• Tata AIG
• UbiCar
• Takaful Islami Insurance Ltd
• Pragati Insurance Company Limited
• PingJia Technology
• Insure The Box
• Aviva Group
• Octo Group S.p.A
• Teltonika Telematics
• ARCUS S.A
• T-matic Systems S.A
• Cefin Romania Systems
• Cambridge Mobile Telematics
• Zubie. Inc
• Modus Group
• LLC
• Metromile Inc
• Amica Mutual Insurance Company
• Sierra Wireless
• Intact Financial Corporation
• TrueMotion
• CAA insurance
• The Co-operators Group Limited
• Desjardins Insurance
• EnVue Telematics
• Aon Risk Services Argentina S.A
• TTMS Argentina S.A
• Lockton Brasil Corretora de Seguros Ltda
• Uai Brazil Insurance Broker
• ALC Corretora de Seguros
• Marsh Brasil - EZ Towers
• Abu Dhabi National Takaful Company
• Oman Insurance Company
• Wehbe Insurance Services LLC
• Al Sagr National Insurance Company
• Noor Takaful Insurance
• Adamjee Insurance Company Limited
• Old Mutual plc
• Santam
• MiWay Insurance
• Hollard Group
• Carrier Insurance Brokers
• Glanvills Enthoven
What Is The Most Dominant Region In The Usage-Based Insurance Market?
North America was the largest region in the usage-based insurance (UBI) market in 2024. The regions covered in the usage-based insurance market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
