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Usage-Based Insurance Market Research Report: By Package Type (Pay-As-You-Drive, Pay-How-You-Drive, Manage-How-You-Drive), Technology (OBD II, Smartphone, Embedded System, Black Box), Vehicle Type (Passenger Car, Commercial Vehicle), Vehicle Age (New Vehicle, On-Road Vehicle), Device Offering (Bring Your Own Device, Company Provided) - Global Industry Analysis and Growth Forecast to 2030

  • Publishing: May 2021
  • Report Code: AT11806
  • Available Format: PDF

Usage-Based Insurance Market Overview

The global usage-based insurance market is projected to grow significantly during the forecast period (2020–2030). Usage-based insurance is a type of vehicle insurance, which leverages in-vehicle communication systems to track driving behavior and vehicle mileage. The automotive insurance market is highly influenced by growing sales of automobiles, which are equipped with telematics and connected car services. Furthermore, rising penetration of smartphones integrated with vehicle connectivity systems, and rapid use of usage-based insurance by insurance companies to improve profitability are other substantial factors for the market growth.

When segmented on the basis of package, the usage-based insurance market has been categorized into pay-how-you-drive (PHYD), pay-as-you-drive (PAYD), and manage-how-you-drive (MHYD). Among these, the PHYD category held the largest market share throughout the historical period (2015–2019). This is attributed to the fact that this model takes into consideration how a driver drive. Insurance companies can record and access driving patterns and skills by mounting telematics systems in vehicles. The PHYD module analyzes the driver’s habits on the basis of numerous parameters, such as braking, speeding, parking, and positioning. This assists the insurance companies to decide premiums, address unfair practices in insurance of a motor vehicle, and ensure that vehicle owners are charged fair premiums.

Geographically, North America is expected to hold the largest share in the usage-based insurance market during the forecast period. The region has the highest adoption rate of usage-based insurance, due to higher regular vehicle insurance premiums, along with increasing adoption of connected cars. Black box insurance technology is widely used in the region and has the presence of several vehicle insurance companies that uses black box technology to monitor driving habits. Such device gathers detailed information for vehicle insurance companies and enables them to estimate insurance risk levels more precisely.

Usage-Based Insurance Market Dynamics

Drivers

The up surge in production and sales of passenger and commercial vehicles that are entrenched with telematics devices is one of the major factors driving the usage-based insurance market growth. These devices collect data regarding vehicles’ condition and driving behavior. This data helps insurance companies to calculate insurance premiums to be paid by owners of the vehicles. Other factors propelling the market growth are increasing adoption of smartphones with features to connect to the onboard devices, along with growing number of connected cars, which share data with outside environment. Extensive acceptance of in-car technologies will impact consumers’ attitude toward usage-based insurance as they are willing to share their driving statistics for personalized insurance quotes.

Restraints

High telematics installation cost is one of the major factors restraining the growth of the usage-based insurance market. Insurance service is largely dependent on telematics, and installation of telematics is a high-technology process, whose cost is estimated to surge in coming years. Due to this, it is expected that operating expenses of usage-based insurance service providers will also increase, which would hinder the market evolution. However, smartphone-based telematics service is projected to attain popularity, owing to relatively lower cost.

Usage-Based Insurance Market Competitive Landscape

Key players functioning in the global usage-based insurance market includes Progressive Corporation, Allstate Insurance Company, Vodafone Group Plc, Octo Telematics SpA, Allianz SE, TomTom N.V., AXA S.A., Verizon Wireless Services LLC, Liberty Mutual Group, and Sierra Wireless Inc.

The report covers country-wise usage-based insurance market analysis. Some of the major countries covered in the report are the U.S., Canada, the U.K., France, Germany, Russia, Italy, Spain, China, Japan, India, South Korea, Australia, Indonesia, Thailand, Malaysia, Brazil, Mexico, South Africa, the U.A.E., Iran, and Saudi Arabia.

Usage-Based Insurance Market Segmentation

By Package Type

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

By Technology

  • On-Board Diagnostics II (OBD II)
  • Smartphone
  • Embedded System
  • Black Box
  • Others

By Vehicle Type

  • Passenger Car
  • Commercial Vehicle

By Vehicle Age

  • New Vehicle
  • On-Road Vehicle

By Device Offering

  • Bring Your Own Device (BYOD)
  • Company Provided

By Region

  • North America Usage-Based Insurance Market
    • By package type
    • By technology
    • By vehicle type
    • By vehicle age
    • By device offering
    • By country – U.S. and Canada
  • Europe Usage-Based Insurance Market
    • By package type
    • By technology
    • By vehicle type
    • By vehicle age
    • By device offering
    • By country – U.K., France, Germany, Russia, Italy, Spain, and Rest of Europe
  • Asia-Pacific (APAC) Usage-Based Insurance Market
    • By package type
    • By technology
    • By vehicle type
    • By vehicle age
    • By device offering
    • By country – China, Japan, India, South Korea, Australia, Indonesia, Thailand, Malaysia, and Rest of APAC
  • Latin America (LATAM) Usage-Based Insurance Market
    • By package type
    • By technology
    • By vehicle type
    • By vehicle age
    • By device offering
    • By country – Brazil, Mexico, and Rest of LATAM
  • Middle East and Africa (MEA) Usage-Based Insurance Market
    • By package type
    • By technology
    • By vehicle type
    • By vehicle age
    • By device offering
    • By country – South Africa, U.A.E., Iran, Saudi Arabia, and Rest of MEA
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