PUBLISHER: The Business Research Company | PRODUCT CODE: 1556207
PUBLISHER: The Business Research Company | PRODUCT CODE: 1556207
Automotive usage-based insurance (UBI) is a type of auto insurance where the premium is determined based on the actual usage of the vehicle. This insurance model utilizes telematics technology to monitor driving habits, mileage, and other relevant factors.
The main types of automotive usage-based insurance include pay-as-you-drive (PAYD), pay-how-you-drive (PHYD), and manage-how-you-drive (MHYD). Pay-as-you-drive (PAYD) is a form of usage-based insurance where the premium is calculated mainly based on the distance driven by the vehicle. This allows drivers to pay for insurance according to their vehicle usage. PAYD is applicable to various vehicle types, such as passenger cars and commercial vehicles, and employs different technologies, including black boxes, on-board diagnostics (OBD) II, embedded smartphones, and others. It is distributed through various channels, such as insurance companies and aggregator platforms, and serves different end-users, including individual consumers and fleet owners or managers.
The automotive usage-based insurance market research report is one of a series of new reports from The Business Research Company that provides automotive usage-based insurance market statistics, including automotive usage-based insurance industry global market size, regional shares, competitors with an automotive usage-based insurance market share, detailed automotive usage-based insurance market segments, market trends and opportunities, and any further data you may need to thrive in the automotive usage-based insurance industry. This automotive usage-based insurance market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.
The automotive usage-based insurance market size has grown rapidly in recent years. It will grow from $41.48 billion in 2023 to $48.90 billion in 2024 at a compound annual growth rate (CAGR) of 17.9%. The growth during the historic period can be attributed to increasing insurance premiums, the expansion of connected vehicles, the need for better risk assessment, regulatory changes supporting usage-based models, and the adoption of mobile apps.
The automotive usage-based insurance market size is expected to see rapid growth in the next few years. It will grow to $95.28 billion in 2028 at a compound annual growth rate (CAGR) of 18.1%. The growth anticipated during the forecast period can be attributed to advancements in AI and machine learning, improved data privacy and security measures, integration with smart home technology, the expansion of subscription-based insurance models, and growing environmental concerns. Major trends for this period include the use of AI and machine learning for better risk assessment, the rise of personalized and flexible insurance models, increased adoption of telematics in electric vehicles, the incorporation of real-time data from connected and autonomous vehicles, and the growth of subscription-based insurance.
The growth in vehicle ownership is anticipated to drive the expansion of the automotive usage-based insurance market. Vehicle ownership involves the possession and registration of motorized vehicles by individuals or entities, encompassing the rights and responsibilities related to the vehicle. This increase in vehicle ownership is attributed to economic growth, higher disposable incomes, urbanization, and a rising need for personal mobility. Automotive usage-based insurance (UBI) appeals to cost-conscious drivers by offering lower premiums to safe and low-mileage drivers, with personalized rates based on individual driving patterns. For example, in June 2024, Statistics Canada, a Canada-based government agency, reported that the total number of road motor vehicles registered in Canada reached 26.3 million in 2022, marking a 0.3% increase from 2021. Consequently, the rise in vehicle ownership is fueling the growth of the automotive usage-based insurance market.
Leading companies in the automotive usage-based insurance sector are focusing on developing advanced solutions, such as technology-driven auto insurance policies, to enhance risk assessment and customer experience. These technology-driven policies tailor coverage and premiums based on real-time driving data and vehicle usage. They employ devices and programs to monitor factors such as speed and braking patterns, delivering customized insurance solutions that reflect individual driving behaviors. For instance, in February 2021, Carro, a Singapore-based automotive marketplace, partnered with Mitsui Sumitomo Insurance (MSI), a Japan-based insurer, to introduce AI-powered behavior and usage-based car insurance (UBI). This model uses data science and artificial intelligence to evaluate driver behavior, offering incentives such as services at Carro workshops for safe driving practices. The insurance aims to promote safer driving and provides a more user-friendly experience through the app2car solution, compared to traditional car insurance.
In July 2022, Lemonade Life Insurance Agency LLC, a US-based insurance company, acquired Metromile for $145 million. This acquisition is intended to enhance Lemonade's capabilities in the vehicle insurance sector by leveraging Metromile's extensive data and technology. Lemonade aims to improve the precision and competitiveness of its auto insurance offerings by integrating Metromile's advanced telematics and data analytics. Metromile, a US-based provider of automobile usage-based insurance, offers products such as pay-per-mile car insurance.
Major companies operating in the automotive usage-based insurance market are State Farm, MetLife Services and Solutions LLC, Nationwide Mutual Insurance Company, Allstate Insurance Company, Progressive Casualty Insurance Company, Chubb Limited, The Travelers Indemnity Company, Aviva plc, Government Employees Insurance Company (GEICO), MAPFRE SA, American Family Insurance, Mitsui Sumitomo Insurance Group, Bajaj Finserv Limited, Verisk Analytics Inc., Liberty Mutual Group Inc., Root Insurance Company, The Zebra, Lemonade Inc., Berjaya Sompo Insurance Berhad, Arity LLC, Octo Telematics S.p.A, Insurethebox limited, Flock Limited, Mile Auto Inc.
North America was the largest region in the automotive usage based insurance market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the automotive usage-based insurance market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
The countries covered in the automotive usage-based insurance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.
The automotive usage-based insurance market consists of revenues earned by entities by providing pay-when-you-drive (PWYD), pay-how-long-you-drive (PHLYD), pay-for-driving (PFD), and pay-for-risk (PFR). 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.
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.
Automotive Usage-Based Insurance Global Market Report 2024 from The Business Research Company provides strategists, marketers and senior management with the critical information they need to assess the market.
This report focuses on automotive usage-based insurance market which is experiencing strong growth. The report gives a guide to the trends which will be shaping the market over the next ten years and beyond.
Where is the largest and fastest growing market for automotive usage-based insurance ? How does the market relate to the overall economy, demography and other similar markets? What forces will shape the market going forward? The automotive usage-based insurance market global report from the Business Research Company answers all these questions and many more.
The report covers market characteristics, size and growth, segmentation, regional and country breakdowns, competitive landscape, market shares, trends and strategies for this market. It traces the market's historic and forecast market growth by geography.
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