The global usage-based insurance market size was valued at $28.7 billion in 2019, and is projected to reach $149.2 billion by 2027, growing at a CAGR of 25.1% from 2020 to 2027. Usage-based insurance is expected to grow rapidly in the coming years. Key drivers of the usage-based insurance market include the growing adoption of telematics technology in the automotive insurance space.
The growing number of vehicles on the road and concerns regarding driver safety will propel the growth of the usage-based insurance market during the forecast period. Moreover, The UBI market size is expected to be spurred on by the impact of covid 19 as transitioning to usage-based models has lowered insurance costs.
Technological advancements
The rapid integration of telematics has created huge opportunities for insurance companies. The in-vehicle monitoring of total distance traveled, driver behavior, braking, cornering, acceleration has allowed insurers to align the premium rates with driver and vehicle safety. This promotes safe driving, reduces pollution, fuel consumption, congestion, and accidents. Consumers are benefitted as lesser use of vehicles will typically reduce premium costs. This provides an incentive to drivers to prevent rash driving. These factors will ultimately propel the growth of the usage-based insurance market during the forecast period. The accurate pricing based on proper analysis provides convenience to insurance companies and attracts customers.
Problems related to driver safety
As per WHO(World Health Organization), about 1.3 million people die globally every year due to road crashes, accidents, and rash driving. This causes a significant loss to human lives and vehicle damage. Hence there is an urgent need for mitigating risks related to driver behavior. Usage-based insurance promotes safe driving behavior as statistics related to miles driven, phone use while driving, acceleration, hard braking, etc are analyzed. Safe driving reduces insurance costs and improves the overall driving score. UBI basically provides an incentive to reduce human errors. This in turn is expected to drive the growth of the usage-based insurance market in the coming years.
Covid 19 impact on UBI Market
Covid 19 has increased remote working models for people across the globe. Consumers are working from home which reduces the need for commutation. People are opting for UBI-based insurance plans for their vehicles as safer driving habits and lesser mileage create huge discounts in the premiums paid to the auto insurance companies. This has increased the adoption of UBI plans thereby driving the growth of the usage-based insurance market during the forecast period. The global shutdown in travel has encouraged organizations to come up with innovative pay as you drive, pay how you drive plans, pay as you go, or distance insurance.
Based on type, the pay as you drive segment is expected to dominate in the usage-based insurance market share as consumers are incentivized to drive safe, green, and less which reduces cost thereby increasing adoption.
Based on region, North America will provide huge scope for growth in the usage-based insurance market share due to flexible driving and roadside assistance.
| Report Metric | Details |
| Report Name | UBI Market |
| The market size in 2019 | $28.7 billion |
| The revenue forecast in 2027 | $149.2 billion |
| Growth Rate | CAGR of 25.1% |
| Market size available for years | 2020-2027 |
| Forecast units | Value (USD) |
| Segments covered | Type, Application, Industry, Regions |
| Report coverage | Revenue & volume forecast, company share, competitive landscape, growth factors, and trends |
| Geographic regions covered | North America, Europe, Asia Pacific, Latin America, Middle East & Africa |
Ans. The global usage-based insurance market size was valued at $28.7 billion in 2019, and is projected to reach $149.2 billion by 2027, growing at a CAGR of 25.1% from 2020 to 2027.
Ans. The key players profiled in the usage-based insurance market analysis are Allianz SE, Allstate Corporation, Aviva, AXA, Insurethebox, Liberty Mutual Insurance, Mapfre S.A., Nationwide Mutual Insurance Company, Progressive Corporation and UNIPOLSAI ASSICURAZIONI S.P.A.
Ans. Yes, the report includes a COVID-19 impact analysis. Also, it is further extended into every individual segment of the report.
Ans. Asia-Pacific would exhibit the highest CAGR of 27.6% during 2020-2027.
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