Usage-Based Insurance Market Report 2026

Usage-Based Insurance Market Overview

• Usage-Based Insurance market size has reached to $82.7 billion in 2025 • Expected to grow to $243.32 billion in 2030 at a compound annual growth rate (CAGR) of 23.1% • Growth Driver: Expansion Of Automobile Industry Propels Growth In Usage-Based Insurance Market • Market Trend: Definity Advances Personalized Auto Insurance with the Launch of Sonnet Shift • North America was the largest region in 2025.

What Is Covered Under Usage-Based Insurance Market?

The usage-based insurance is frequently powered by telematics technology, which is accessible in vehicles via a plug-in device or is pre-installed in the car's system, and that can also be accessed via mobile apps and delivers insurers with a variety of data, including how far the vehicle is driven, how it's driven, and where it's driven. The usage-based insurance provides auto insurance services by placing monitoring devices in the vehicle. The main vehicle types of usage-based insurance are light-duty vehicles (LDV) and heavy-duty vehicles (HDV). Light-duty vehicles are passenger cars having a maximum gross vehicle weight of fewer than 8500 lbs. The different technologies include OBD-II-based UBI programs, smartphone-based UBI programs, black-box-based UBI programs, and others are used in various types of packages such as pay-as-you-drive (PAYD), pay-how-you-drive (PHYD), manage-how-you-drive (MHYD).

What Is The Usage-Based Insurance Market Growth Forecast?

The usage-based insurance market size is expected to see exponential growth in the next few years. It will grow to $243.32 billion in 2030 at a compound annual growth rate (CAGR) of 23.1%. The growth in the forecast period can be attributed to growing penetration of connected and electric vehicles, rising demand for personalized insurance products, expansion of ai-driven risk modeling, increasing adoption of smart mobility solutions, regulatory support for telematics-based insurance. Major trends in the forecast period include increasing adoption of telematics-based insurance models, rising use of real-time driving behavior analytics, growing deployment of smartphone-based ubi programs, expansion of personalized insurance pricing, enhanced focus on risk-based premium models.

Global Usage-Based Insurance Market Segmentation

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

What Is The Driver Of The Usage-Based Insurance Market?

The expansion of the automobile industry is expected to propel the growth of the usage-based insurance market in the coming years. The automotive industry is made up of a diverse group of businesses and organizations that are involved in the design development, production, marketing, and sale of automobiles. Car owners are interested in telematics-driven usage-based insurance since it provides low premiums for low-risk driving and high premiums for high-risk driving. As a result, by correcting their driving habits, individuals can drastically lower their insurance premiums. For instance, in 2023, according to the Organisation Internationale des Constructeurs d'Automobiles (OICA), a France-based international association of automobile manufacturers, the global automotive industry in 2023 experienced notable growth, with total vehicle production reaching 93546599 units, a significant increase from the 85016728 units produced in 2022. Therefore, the growth in the automobile industry drives the growth of the usage-based insurance industry.

Key Players In The Global Usage-Based Insurance Market

Major companies operating in the usage-based insurance market are Progressive Corporation, Allstate Corporation, Allianz SE, AXA, Liberty Mutual Insurance, State Farm Mutual Automobile Insurance Company, American International Group Inc, Nationwide Mutual Insurance Company, UNIPOLSAI ASSICURAZIONI S.P.A, Mapfre S.A., Aviva Group, Metromile Inc, Amica Mutual Insurance Company, Intact Financial Corporation, CAA Insurance, The Co-operators Group Limited, Desjardins Insurance, Adamjee Insurance Company Limited, Santam, Hollard Group

Global Usage-Based Insurance Market Trends and Insights

Major companies operating in the Usage-Based Insurance (UBI) market are focusing on developing advanced solutions such as telematics-driven premium adjustment systems to enhance personalized pricing and promote safer driving behaviours. A telematics-driven premium adjustment system uses data from driving behaviour such as speed time of day fatigue mobile distraction and road risk to calculate insurance costs that reflect how safely and frequently an individual drives which helps drivers control their premiums and encourages improved driving patterns. For instance, in September 2023, Definity Financial Corporation, a Canada-based property and casualty insurer launched, sonnet shift featuring advanced telematics powered by the floow and munich re global consulting that uses individual driving behaviours and preferences as the main factor for pricing. The product offers quarterly price adjustments based on recent driving scores which allows drivers to save up to 35 percent on auto insurance for safe driving and up to 10 percent for lower mileage. The system provides personalized tips based on driving habits and gives customers 24/7 access to driving data through a mobile app where projected discounts or surcharges update weekly. Sonnet Shift also allows passengers to indicate non-driving trips for accurate data capture and supports expansion beyond Ontario in future.

What Are Latest Mergers And Acquisitions In The Usage-Based Insurance Market?

In October 2023, Allianz Partners, a US-based Insurance company partnered with Bolttech Management Limited to enable retailers and telecom providers to seamlessly integrate insurance products into customer experiences. The partnership aims to address the low non-life insurance penetration in Asia and capitalize on the growing global market for extended warranties. Bolttech Management Limited is a US-based insurance company that offers usage based insurance services.

Regional Outlook

North America was the largest region in the usage-based insurance (UBI) market in 2025. The regions covered in this market report are Asia-Pacific, South East Asia, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in this market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

What Defines the Usage-Based Insurance Market?

The usage-based insurance market includes revenues earned by entities by driving-based and milage-based insurance. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

How is Market Value Defined and Measured?

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified). The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

What Key Data and Analysis Are Included in the Usage-Based Insurance Market Report 2026?

The usage-based insurance market research report is one of a series of new reports from The Business Research Company that provides market statistics, including Market Report 2026?global market size, regional shares, competitors with the market share, detailed market segments, market trends and opportunities, and any further data you may need to thrive in the usage-based insurance Market Report 2026? The market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future state of the Market Report 2026?