Rise in adoption of usage-based insurance among the end user owing to its various features such as providing accurate and timely data collection methods and flexible insurance premiums fuels the growth of the global usage-based insurance market.
Allied Market Research published a report, titled, “Usage-Based Insurance Market by Policy Type [Pay-As-You-Drive Insurance (PAYD), Pay-How-You-Drive Insurance (PHYD), and Manage-How-You-Drive Insurance (MHYD)], Technology (OBD-II-Based UBI Programs, Smartphone-Based UBI Programs, Hybrid-Based UBI Programs, and Black-Box-Based UBI Programs), Vehicle Age (New Vehicles and Used Vehicles), Vehicle Type (Light-Duty Vehicle (LDV) and Heavy-Duty Vehicle (HDV)): Global Opportunity Analysis and Industry Forecast, 2020–2027.” According to the report, the global usage-based insurance industry was estimated at $28.7 billion in 2019, and is anticipated to hit $149.2 billion by 2027, registering a CAGR of 25.1% from 2020 to 2027.
Rise in adoption of usage-based insurance among the end user owing to its various features such as providing accurate and timely data collection methods and flexible insurance premiums fuels the growth of the global usage-based insurance market. On the other hand, high installation cost of telematics and various data security issues hamper the growth to some extent. Nevertheless, adoption of advance technology such as smartphone-based UBI & hybrid-based UBI and increase in concerns regarding driver’s safety across the globe are expected to create lucrative opportunities in the industry.
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- Implementation of lockdowns and a lot of restrictions imposed on travel have impacted the global market for usage-based insurance to a significant extent. Also, the growing work-from-home culture has wedged the market substantially.
- However, to overcome these several challenges, insurers have established new policies to enhance the claim processes and offer better user experience.
The pay-as-you-drive segment to dominate by 2027-
Based on policy type, the pay-as-you-drive segment contributed to nearly three-fifths of the global usage-based insurance market revenue in 2019 and is expected to rule the roost by the end of 2027, due to encouragement to consumers to drive less and go green. The manage-how-you-drive segment, on the other hand, would portray the fastest CAGR of 29.7% throughout the forecast period. Its high-end safety and security services drive the segment growth.
The black-box segment to maintain the dominant share-
Based on technology, the black-box segment accounted for more than three-fifths of the global usage-based insurance market share in 2019 and is expected to lead the trail by 2027. This is because penetration of black box-based insurance is increasing among higher risk policy holders. Simultaneously, the smartphone segment would manifest the fastest CAGR of 30.3% till 2027, due to convenience regarding collection of data through smartphone apps.
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North America garnered the major share in 2019-
Based on geography, North America garnered the major share in 2019, holding nearly two-fifths of the global usage-based insurance market, due to the growing popularity of UBI in the province. At the same time, Asia-Pacific would register the fastest CAGR of 27.6% till 2027, owing to the presence of the key players who have established their market in the emerging countries which include China and India.
Key players in the industry-
- Allstate Corporation
- Progressive Corporation and UNIPOLSAI ASSICURAZIONI S.P.A.
- Nationwide Mutual Insurance Company
- Liberty Mutual Insurance
- Mapfre S.A.
- Allianz SE