Usage-based Insurance (UBI) Market Size By Package (Pay-How-You-Drive (PHYD), Pay-As-You-Drive (PAYD) [Device-based, Telematics-based]), By Technology (OBD-II, Smartphone, Blackbox, Embedded Telematics), By Vehicle Type (Passenger Vehicle, Commercial Vehicle), Industry Analysis Report, Regional Outlook (U.S., Canada, UK, Germany, France, Italy, Spain, Austria, Netherlands, China, Australia, Southeast Asia, Japan, India, South Africa, Brazil, Mexico, Colombia. Saudi Arabia, UAE, Qatar), Growth Potential, Competitive Market Share & Forecast, 2018 - 2024

Published Date: November 2018 | 270 Pages | Report ID: GMI3020 Report Format: PDF

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Industry Trends

Usage-based Insurance Market size estimated at USD 34 billion in 2017, growing at a CAGR of over 17% from 2018 to 2024.
 

U.S. Usage-based Insurance (UBI) Market Revenue, By Technology, 2017 & 2024 (USD Million)
 U.S. Usage-based Insurance (UBI) Market Revenue, By Technology, 2017 & 2024 (USD Million)

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The usage-based insurance market is projected to exhibit an accelerated growth between 2018 and 2024 as the usage of insurance models such as PAYD and PHYD is rapidly growing. With UBI, the insurance companies determine the premium based on drivers’ driving behavior. The adoption of telematics and other communication technologies to monitor the driving patterns will lead towards excellent market growth over the forecast timeline. The market growth is attributed to the factors such as growing popularity of the Manage-How-You-Drive solutions, increased penetration of smartphones, and rise in the usage of UBI by insurance companies to increase profitability. UBI makes it possible for the insurers to evaluate risks based on each driver’s profile, trip characteristics, and the current condition of the vehicle. This helps them in a better assessment of the risks and the prevention of fraudulent claims. The insurers are using insurance telematics to increase their customer base by using driving data to improve the policy pricing.
 

The adoption of smartphones with telematics applications enables car makers and insurers to collect driving data and record trip parameters of hard braking, and acceleration. The driving data then is used by them to design UBI policies and in determining the policyholder’s premium. The huge adoption of smart-phone-based telematics is expected to drive the usage-based insurance market growth.
 

Usage-based Insurance (UBI) Market, By Package

The PAYD market is expected to register an excellent CAGR of over 19% during the forecast timeline. PAYD insurance focuses on monitoring miles driven and pricing policies based on the mileage. With PAYD, insurers provide customers an option to select the number of miles they want to have and enable them to buy additional miles in case they need them. PAYD promotes safe driving as the customers will be charged more if they do not drive well.
 

In 2017, device-based PAYD solutions held a dominant share of over 80% in the usage-based insurance market. Various devices, such as odometers, OBD dongles, and smartphones, are used to gather the driving information to determine the driving behavior, fuel efficiency, and road conditions. These devices hold the largest share of the usage-based insurance market as they are easy to install and also provide a wide range of connected car services ranging from diagnostics, remote car control, maintenance alerts, and location tracking.
 

Italy Usage-based Insurance Market Revenue, By Package, 2017 & 2024 (USD Million)
Italy Usage-based Insurance Market Revenue, By Package, 2017 & 2024 (USD Million)

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Usage-based Insurance (UBI) Market, By Technology

The embedded telematics segment is projected to grow at an impressive CAGR of over 26% in the overall market between 2018 and 2024. The telematics technology enables car owners and insurers to aggregate a massive amount of data on car usage patterns, maintenance needs, and performance. The automakers are installing telematics equipment in vehicles, which measures actual driving habits based on a vehicle’s real-time driving data. Based on this data, the insurers can decide the premium amount offered to the driver. The smartphones are widely being used in telematics as standalone devices or with embedded technology. The telematics applications in smartphones provide users with an instant feedback based on their driving style and provide tips to improve their behavior to avail higher discounts on the insurance premium.
 

Usage-based Insurance (UBI) Market, By Vehicle Type

The passenger vehicles segment held a major share of the usage-based insurance market of around 85% in 2017. The use of telematics devices in passenger cars enables drivers to monitor the vehicle parameters and helps in improving the four types of service areas such as information, safety, navigation, and remote diagnostics. The growth in the number of passenger cars will augment the adoption of telematics solutions, which will provide the relevant information to the insurers about the driving patterns and help in customizing insurance policies based on the driving behavior.
 

France UBI Market Revenue, By Vehicle, 2017 & 2024 (USD Million)
France UBI Market Revenue, By Vehicle, 2017 & 2024 (USD Million)

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Usage-based Insurance (UBI) Market, By Region

In LAMEA, the usage-based insurance market is projected to witness the highest growth rate of over 25% from 2018 to 2024. The market growth is driven by an increase in the uptake of telematics technology to support the insurance telematics programs in the countries including South Africa, Brazil, and Mexico. The software solution providers are partnering with insurance companies to offer new insurance telematics solutions. For instance, in September 2017, Car Security adopted CalAmp’s telematics technology stack and CrashBox vehicle risk management services platform to streamline its connected car offerings. Under the partnership, CalAmp offers insurance companies the telematics tools to optimize the claim management process. The growth in the number of connected cars in the region will also accelerate the UBI market growth. As the connected cars are equipped with advanced in-car technologies and sensors, the automakers and the insurance agencies can easily collect driving data to analyze risks and offer new value-added offerings to policyholders.
 

Competitive Market Share

The competition in the usage-based insurance market is characterized by various partnerships and acquisitions happening between insurance providers, automakers, and telematics solution providers. For instance, in October 2017, Octo Telematics acquired the assets of Willis Towers Watson to strengthen its insurance telematics portfolio. Following the transaction, the company also developed an alliance with Watson on telematics opportunities to enhance the company’s offerings. As the insurance industry is highly competitive, the companies are developing new UBI programs to differentiate their offerings. For instance, in September 2018, EverQuote launched safe driving insurance offers for its EverDrive app users. In partnership with the Octo Telematics and State Auto Insurance Company, the company offers discounts of up to 50% on the auto insurance to the drivers who enroll in EverDrive’s insurance offers. 
 

Some of the major players of the operating in the market are Progressive, Allstate, State Farm, AXA, Allianz, Liberty Mutual, Nationwide, Vodafone Automotive, UnipolSai, Generali, Octo, Metromile, TomTom, Insure The Box, Mapfre S.A, Zubie, Desjardins Group, Sierra Wireless, IMS, Cambridge Mobile Telematics, and Danlaw.
 

Industry Background


Usage-based Insurance (UBI) Market

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The telematics technology has transformed the automotive insurance industry. Earlier, the automotive insurance policies were based on factors such as demographics and personal information. With the advent of telematics, the insurers consider several factors such as hard braking, acceleration, location, and the type of the road used to analyze the driving information. Telematics data enables them to assess the driver profile risks and develop new customized UBI policies based on their driving habits. The rise in the number of connected cars has also contributed toward the growth of the UBI as they collect a massive amount of data, which then can be used by car makers and insurers to determine the driving behavior and vehicle conditions.
 


What Information does this report contain?

Historical data coverage: 2013 to 2017; Growth Projections: 2018 to 2024.
Expert analysis: industry, governing, innovation and technological trends; factors impacting development; drawbacks, SWOT.
6-7 year performance forecasts: major segments covering applications, top products and geographies.
Competitive landscape reporting: market leaders and important players, competencies and capacities of these companies in terms of production as well as sustainability and prospects.


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