Usage-based Insurance Market by Package Type, Technology, Device Offering, Vehicle Type

Description

List of Tables

[186 Pages Report] The Usage-based Insurance Market size was estimated at USD 38.48 billion in 2023 and expected to reach USD 45.81 billion in 2024, at a CAGR 20.01% to reach USD 138.03 billion by 2030.

Usage-based insurance (UBI) is a type of auto insurance policy that calculates premiums based on the actual usage and driving behavior of the insured vehicle. Instead of using traditional factors such as age, gender, and location to determine rates, UBI relies on real-time data collected through telematics devices installed in the vehicle. The widespread adoption of connected cars equipped with advanced technologies such as telematics systems has made it easier for insurers to collect real-time data on driving patterns. Furthermore, increasing government regulations supporting road safety initiatives has significantly boosted the demand for usage-based insurance. However, privacy concerns related to the collection, storage, and use of personal driving data are a significant concern for many consumers. The UBI market's expansion is impeded by a lack of standardization in telematics technology, making it challenging for insurers to offer consistent services across different devices. Furthermore, the ongoing advancements in big data analytics and artificial intelligence are expected to provide potential opportunities for growth in the UBI market. These technologies can enable companies to process vast amounts of data effectively and make informed decisions regarding pricing strategies, risk assessment models, and marketing campaigns targeting specific demographics. Additionally, rising consumer awareness regarding the benefits of usage-based insurance policies is expected to enhance demand for UBI.

KEY MARKET STATISTICS
Base Year [2023]	USD 38.48 billion
Estimated Year [2024]	USD 45.81 billion
Forecast Year [2030]	USD 138.03 billion
CAGR (%)	20.01%

Package Type: The proliferation of Manage-how-you-drive packages to improve driving behavior

Manage-how-you-drive (MHYD) insurance is a need-based approach that emphasizes improving driving behavior through feedback and monitoring. It primarily targets drivers wanting to take a proactive role in enhancing their driving habits to reduce premiums. MHYD policies track key metrics such as speeding, hard braking, and cornering through telematics devices or mobile apps. Pay-as-you-drive (PAYD) insurance is designed for motorists that cover shorter distances or drive less frequently. This model offers flexibility by charging premiums based on actual miles driven, making it an ideal choice for people with irregular or low-mileage driving patterns, such as retirees or urban dwellers. Pay-how-you-drive (PHYD) insurance combines the features of MHYD and PAYD, offering premium adjustments based on mileage and driving behavior. PHYD policies cater to customers seeking a more personalized and comprehensive approach to usage-based insurance.

Technology: Significant adoption of embedded systems due to their advanced features, such as emergency assistance or vehicle diagnostics

A black box is a small device installed in vehicles to record and analyze driving data. The information collected includes speed, distance, acceleration, braking patterns, and other essential parameters. A black box is primarily used by insurance companies to assess driver behavior and adjust premiums accordingly. An embedded system integrates software and hardware within a vehicle's electronic control unit (ECU). This integrated system enables real-time monitoring of vehicle usage and driver behavior, which can be utilized by UBI providers for accurate risk assessment. On-board diagnostics (OBD-II) is a universal port in most vehicles manufactured since 1996. UBI providers use OBD-II devices to collect driving data for usage-based insurance programs. Smartphone-based UBI utilizes mobile applications to collect and analyze driving data using built-in sensors, including GPS, accelerometer, and gyroscope.

Vehicle Type: Growing potential across passenger cars due to its personalized premiums based on individual driver behavior

Commercial vehicles include trucks, vans, buses, and other vehicles used primarily for business. Companies operating fleets prefer UBI for its ability to reduce insurance costs while encouraging safer driving habits among their drivers. Key factors influencing the demand for usage-based insurance in this segment are operational efficiency, cost savings, and fleet management optimization. Passenger cars include sedans and minivans, where individuals primarily drive these vehicles for personal use. The primary factors driving the demand for usage-based insurance in this segment are personalized premiums based on actual driving habits, potential cost savings, and increased awareness of safe driving practices.

Device Offering: The significant popularity of BYOD among insurers due to its cost-effective implementation and flexibility

Bring your own device (BYOD) allows policyholders to use their existing smartphones, telematics devices, or OBD-II dongles to track their driving behavior data. The UBI solution provider enables the integration of these devices with their platform through dedicated apps or APIs. In company-provided schemes, insurers partner with telematics service providers to supply customers with dedicated devices, including OBD-II dongles and black boxes. These devices record driving behavior data used by insurers to offer personalized premiums. The company-provided devices typically have a higher accuracy in data collection and can provide additional value-added services for vehicle diagnostics and maintenance.

Regional Insights

In the Americas, the usage-based insurance (UBI) market has witnessed substantial growth. The region benefits from a highly developed telematics infrastructure and a tech-savvy consumer base. Europe, the Middle East, and Africa have witnessed growth in the usage-based insurance (UBI) market in recent years, driven by increased smartphone penetration, rising concerns over road safety, and growing demand for personalized services. Key countries, including the UK, Germany, France, Russia, Spain, and the Netherlands, are leading this growth trajectory, with traditional insurers and specialized UBI providers vying for market share. Meanwhile, the Middle East and Africa are gradually embracing UBI, with South Africa and the UAE showing notable interest. In the Asia-Pacific region, countries including China, Japan, and South Korea are leading the way, driven by a large and tech-savvy population. Favorable government policies and innovative startups are entering the market, offering unique UBI solutions tailored to the specific needs of Asian consumers.

FPNV Positioning Matrix

The FPNV Positioning Matrix is pivotal in evaluating the Usage-based Insurance Market. It offers a comprehensive assessment of vendors, examining key metrics related to Business Strategy and Product Satisfaction. This in-depth analysis empowers users to make well-informed decisions aligned with their requirements. Based on the evaluation, the vendors are then categorized into four distinct quadrants representing varying levels of success: Forefront (F), Pathfinder (P), Niche (N), or Vital (V).

Market Share Analysis

The Market Share Analysis is a comprehensive tool that provides an insightful and in-depth examination of the current state of vendors in the Usage-based Insurance Market. By meticulously comparing and analyzing vendor contributions in terms of overall revenue, customer base, and other key metrics, we can offer companies a greater understanding of their performance and the challenges they face when competing for market share. Additionally, this analysis provides valuable insights into the competitive nature of the sector, including factors such as accumulation, fragmentation dominance, and amalgamation traits observed over the base year period studied. With this expanded level of detail, vendors can make more informed decisions and devise effective strategies to gain a competitive edge in the market.

Key Company Profiles

The report delves into recent significant developments in the Usage-based Insurance Market, highlighting leading vendors and their innovative profiles. These include Allianz SE, Allstate Corporation, Amica Mutual Insurance Company, Assicurazioni Generali S.p.A., AXA SA, CalAmp Wireless Networks Corporation, Cambridge Mobile Telematics, Inc., CerebrumX Lab Inc., Credit Karma, LLC by Intuit Inc., Definity Financial Corporation, General Motors Company, Go Digit General Insurance Limited, HDFC ERGO General Insurance Company Limited, ICICI Lombard General Insurance Company Ltd., Lemonade, Inc., LexisNexis Risk Solutions Inc. by RELX plc, Liberty Mutual Group Inc., MAPFRE S.A, Modus Group, LLC, Nationwide Mutual Insurance Company, Octo Group S.p.A., Progressive Casualty Insurance Company, Reliance General Insurance Company Limited by Reliance Capital Limited, Sierra Wireless by Semtech Corporation, State Farm Mutual Automobile Insurance Company, The Floow Limited by Otonomo Technologies Ltd., The Government Employees Insurance Company, The New India Assurance Co. Ltd., The Travelers Indemnity Company, Unipol Gruppo S.p.A., United Services Automobile Association, Verisk Analytics, Inc., Zubie, Inc., and Zuno General Insurance Limited.

Market Segmentation & Coverage

This research report categorizes the Usage-based Insurance Market to forecast the revenues and analyze trends in each of the following sub-markets:

Package Type
- Manage-How-You-Drive
- Pay-As-You-Drive
- Pay-How-You-Drive

Technology
- Black Box
- Embedded System
- OBD-II
- Smartphone

Device Offering
- Bring Your Device (BYOD)
- Company Provided

Vehicle Type
- Commercial Vehicle
- Passenger Car

Region
- Americas
  - Argentina
  - Brazil
  - Canada
  - Mexico
  - United States
    - California
    - Florida
    - Illinois
    - New York
    - Ohio
    - Pennsylvania
    - Texas
- Asia-Pacific
  - Australia
  - China
  - India
  - Indonesia
  - Japan
  - Malaysia
  - Philippines
  - Singapore
  - South Korea
  - Taiwan
  - Thailand
  - Vietnam

Europe, Middle East & Africa
- Denmark
- Finland
- France
- Germany
- Israel
- Italy
- Netherlands
- Norway
- Poland
- Qatar
- Russia
- Saudi Arabia
- South Africa
- Spain
- Sweden
- Switzerland
- Turkey
- United Arab Emirates
- United Kingdom

The report offers valuable insights on the following aspects:

1. Market Penetration: It presents comprehensive information on the market provided by key players.

2. Market Development: It delves deep into lucrative emerging markets and analyzes the penetration across mature market segments.

3. Market Diversification: It provides detailed information on new product launches, untapped geographic regions, recent developments, and investments.

4. Competitive Assessment & Intelligence: It conducts an exhaustive assessment of market shares, strategies, products, certifications, regulatory approvals, patent landscape, and manufacturing capabilities of the leading players.

5. Product Development & Innovation: It offers intelligent insights on future technologies, R&D activities, and breakthrough product developments.

The report addresses key questions such as:

1. What is the market size and forecast of the Usage-based Insurance Market?

2. Which products, segments, applications, and areas should one consider investing in over the forecast period in the Usage-based Insurance Market?

3. What are the technology trends and regulatory frameworks in the Usage-based Insurance Market?

4. What is the market share of the leading vendors in the Usage-based Insurance Market?

5. Which modes and strategic moves are suitable for entering the Usage-based Insurance Market?

Product Code: MRR-034B5003033B

1. Preface

1.1. Objectives of the Study
1.2. Market Segmentation & Coverage
1.3. Years Considered for the Study
1.4. Currency & Pricing
1.5. Language
1.6. Stakeholders

2. Research Methodology

2.1. Define: Research Objective
2.2. Determine: Research Design
2.3. Prepare: Research Instrument
2.4. Collect: Data Source
2.5. Analyze: Data Interpretation
2.6. Formulate: Data Verification
2.7. Publish: Research Report
2.8. Repeat: Report Update

3. Executive Summary

4. Market Overview

5. Market Insights

5.1. Market Dynamics
- 5.1.1. Drivers
  - 5.1.1.1. Adoption of UBI to lower insurance premiums compared to regular insurance
  - 5.1.1.2. Growing adoption of connected car services
- 5.1.2. Restraints
  - 5.1.2.1. Need for continuous monitoring and accuracy issues associated with usage-based insurance models
- 5.1.3. Opportunities
  - 5.1.3.1. Ongoing advancements in usage-based insurance solutions for improved efficiency and user experience
  - 5.1.3.2. Government emphasis and regulations associated with automotive insurance
- 5.1.4. Challenges
  - 5.1.4.1. Issues of data collection along with privacy concerns
5.2. Market Segmentation Analysis
- 5.2.1. Package Type: The proliferation of Manage-how-you-drive packages to improve driving behavior
- 5.2.2. Technology: Significant adoption of embedded systems due to their advanced features, such as emergency assistance or vehicle diagnostics
- 5.2.3. Vehicle Type: Growing potential across passenger cars due to its personalized premiums based on individual driver behavior
- 5.2.4. Device Offering: The significant popularity of BYOD among insurers due to its cost-effective implementation and flexibility
5.3. Market Trend Analysis
- 5.3.1. Well-established regulations for telematics implementation and significant emphasis on customized usage-based insurance in the Americas
- 5.3.2. Expanding vehicle sales and improved awareness toward usage-based insurance solutions in the Asia-Pacific
- 5.3.3. Government focus on deploying advanced technologies in automobiles to ensure road safety coupled with rising adoption of usage-based insurance services in the EMEA region
5.4. Cumulative Impact of High Inflation
5.5. Porter's Five Forces Analysis
- 5.5.1. Threat of New Entrants
- 5.5.2. Threat of Substitutes
- 5.5.3. Bargaining Power of Customers
- 5.5.4. Bargaining Power of Suppliers
- 5.5.5. Industry Rivalry
5.6. Value Chain & Critical Path Analysis
5.7. Regulatory Framework Analysis

6. Usage-based Insurance Market, by Package Type

6.1. Introduction
6.2. Manage-How-You-Drive
6.3. Pay-As-You-Drive
6.4. Pay-How-You-Drive

7. Usage-based Insurance Market, by Technology

7.1. Introduction
7.2. Black Box
7.3. Embedded System
7.4. OBD-II
7.5. Smartphone

8. Usage-based Insurance Market, by Device Offering

8.1. Introduction
8.2. Bring Your Device (BYOD)
8.3. Company Provided

9. Usage-based Insurance Market, by Vehicle Type

9.1. Introduction
9.2. Commercial Vehicle
9.3. Passenger Car

10. Americas Usage-based Insurance Market

10.1. Introduction
10.2. Argentina
10.3. Brazil
10.4. Canada
10.5. Mexico
10.6. United States

11. Asia-Pacific Usage-based Insurance Market

11.1. Introduction
11.2. Australia
11.3. China
11.4. India
11.5. Indonesia
11.6. Japan
11.7. Malaysia
11.8. Philippines
11.9. Singapore
11.10. South Korea
11.11. Taiwan
11.12. Thailand
11.13. Vietnam

12. Europe, Middle East & Africa Usage-based Insurance Market

12.1. Introduction
12.2. Denmark
12.3. Finland
12.4. France
12.5. Germany
12.6. Israel
12.7. Italy
12.8. Netherlands
12.9. Norway
12.10. Poland
12.11. Qatar
12.12. Russia
12.13. Saudi Arabia
12.14. South Africa
12.15. Spain
12.16. Sweden
12.17. Switzerland
12.18. Turkey
12.19. United Arab Emirates
12.20. United Kingdom

13. Competitive Landscape

13.1. Market Share Analysis, 2023
13.2. FPNV Positioning Matrix, 2023
13.3. Competitive Scenario Analysis
- 13.3.1. Reliance General Insurance unveils 'Reliance Limit Sure Pay As You Drive'
- 13.3.2. The Floow Partners with Definity and Munich Re Global Consulting to Bring New, Usage-Based Auto Insurance Product to Canada
- 13.3.3. Definity Launches Sonnet Shift: a New Usage-based Insurance Offering Giving Customers Control of Their Premiums
- 13.3.4. Citroen India Launches UBI Program in Partnership with ICICI Lombard General Insurance: Encourages Safe Driving Practices
- 13.3.5. Jerry's AI-Powered Revolution in Car Insurance Accelerates with USD 110 Million Raise
- 13.3.6. Lexasure to Provide Captive Car Insurance for My Car Consultant
- 13.3.7. ACKO, Multipl Tie up to Combine Insurance with Investment
- 13.3.8. Direct Line Group Acquires By Miles
- 13.3.9. Cambridge Mobile Telematics Acquires Amodo
- 13.3.10. Zuno General to Ride on 'Usage-Based Insurance,' Plans to Roll Out 'Pay How You Drive' Offering
- 13.3.11. New India Assurance Launches 'Pay as you Drive' Policy
- 13.3.12. Researchers Submit Patent Application, "Blockchain Controlled Multi-Carrier Auction System For Usage-Based Auto Insurance," for Approval

14. Competitive Portfolio

14.1. Key Company Profiles
14.2. Key Product Portfolio