Usage Based Insurance Market Overview:
Global Usage Based Insurance Market size and share is currently valued at USD 34.26 billion in 2024 and is anticipated to generate an estimated revenue of USD 154.89 billion by 2032, according to the latest study by Polaris Market Research. Besides, the report notes that the market exhibits a robust 20.8% Compound Annual Growth Rate (CAGR) over the forecasted timeframe, 2024 – 2032.
The usage-based insurance (UBI) market is gaining traction as insurers and customers adopt telematics-based solutions to personalize premiums based on driving behavior. UBI offers cost efficiency, safety incentives, and advanced analytics for both insurers and policyholders.
Key Market Drivers:
- Growing Adoption of Telematics Technology: Advancements in telematics devices and in-vehicle connectivity drive the adoption of UBI solutions.
- Demand for Cost-Efficient Insurance: Consumers seek personalized premiums that reflect actual usage, leading to higher demand for UBI policies.
- Government Support and Regulations: Supportive policies and regulations promoting telematics and road safety are fueling UBI market growth.
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Key Companies in Usage Based Insurance Market:
- Aioi Nissay Dowa Insurance UK Ltd (UK)
- Allianz (Germany)
- Allstate Insurance Company (U.S.)
- Bridgestone Mobility Solutions B.V. (Netherlands)
- Liberty Mutual Insurance (U.S.)
- MAPFRE (Spain)
- Progressive Casualty Insurance Company (U.S.)
- State Farm Mutual Automobile Insurance Company (U.S.)
- UNIPOLSAI ASSICURAZIONI S.P.A. (Italy)
- Verisk Analytics, Inc. (U.S.)
- Verizon (U.S.)
Industry Developments
The UBI market is witnessing the integration of AI and big data analytics to refine risk assessments and enhance policy customization. Partnerships between automakers and insurance providers are driving the adoption of embedded telematics systems. Additionally, insurers are launching app-based solutions that simplify policy management and customer engagement.
Challenges and Opportunities
Challenges include data privacy concerns and the high initial cost of telematics devices. However, opportunities lie in the rising demand for pay-as-you-drive (PAYD) and pay-how-you-drive (PHYD) models, particularly among young and tech-savvy drivers. The increasing penetration of electric vehicles (EVs) also presents untapped potential for specialized UBI offerings tailored to EV drivers.
Usage Based Insurance Market Segmentation:
Polaris Market Research has segmented the usage-based insurance market report based on type, technology, vehicle type, end-user, and region, providing a comprehensive analysis of trends and growth opportunities.
Usage Based Insurance, Policy Type Outlook (Revenue – USD Billion, 2019 – 2032)
- Pay-As-You-Drive (PAYD)
- Pay-How-You-Drive (PHYD)
- Manage-How-You-Drive (MHYD)
Usage Based Insurance, Technology Outlook (Revenue – USD Billion, 2019 – 2032)
- OBD (On-Board Diagnostics)-II
- Smartphone
- Embedded Telematics
- Others
Usage Based Insurance, Vehicle Age Outlook (Revenue – USD Billion, 2019 – 2032)
- New Vehicles
- Old Vehicles
Usage Based Insurance, Vehicle Type Outlook (Revenue – USD Billion, 2019 – 2032)
- Light-Duty Vehicle (LDV)
- Heavy-Duty Vehicle (HDV)
The UBI market is poised for significant growth, driven by technological advancements and consumer demand for personalized insurance. Companies focusing on innovation, data security, and customer-centric solutions are well-positioned to thrive in this evolving industry.