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), COVID19 Impact Analysis, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2021 – 2027

Published Date: May 2021  |  Report ID: GMI3020  |  Authors: Preeti Wadhwani, Smriti Loomba

Report Format: PDF   |   Pages: 285   |   Base Year: 2020




Summary Table of Contents Industry Coverage Methodology

Industry Trends

Usage-based Insurance (UBI) Market size exceeded USD 30 billion in 2020 and is estimated to grow at over 20% CAGR between 2021 and 2027. Growing demand for remote diagnostic technology across the automobile industry is likely to propel the industry growth. Due to the increasing complexities of vehicles, the use of remote vehicle diagnostic systems using data-driven technology is gaining more traction in the automobile sector. The remote diagnostic technology brings a safety mechanism that will allow the vehicle to be monitored and controlled using a remote operator.
 

Usage-based Insurance (UBI) Market

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Remote diagnostics solutions bundled with UBI are enabling enterprises to differentiate their offerings in highly competitive insurance industry, creating new avenues to expand their clientele. The use of vehicle telematics solutions is enabling insurance companies to track various driving patterns and vehicle conditions to decide vehicle insurance premiums.
 

The recent COVID-19 outbreak resulted in restrictions on the movement of vehicles across the globe. The unstable global economic conditions owing to the pandemic enabled consumers to avoid buying new auto insurance policies. After recovering from the COVID-19 outbreak, the consumers realized the benefits of UBI insurance over traditional insurance as the high premiums charged by insurance companies for unused vehicles. 
 

Usage-based Insurance (UBI) Market Report Coverage
Report Coverage Details
Base Year:2020
Market Size in 2020:30 Billion (USD)
Forecast Period:2021 to 2027
Forecast Period 2021 to 2027 CAGR:20%
2027 Value Projection:125 Billion (USD)
Historical Data for:2016 to 2019
No. of Pages:285
Tables, Charts & Figures:381
Segments covered:Package, Technology, Vehicle Type, and Region
Growth Drivers:
  • Growth of the automobile industry
  • Shifting focus towards remote diagnostic technology
  • Growth in the number of the connected cars bringing new UBI opportunities
  • Rising penetration of smartphones integrated with vehicle connectivity systems
  • Rapid use of UBI by insurance companies to improve profitability
  • Growing trend of Try-Before-You-Buy (TBYB) insurance model
Pitfalls & Challenges:
  • Data security and privacy concerns
  • Data quality issues with smartphone based UBI system
  • Increasing compatibility issues

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Rising demand for affordable pricing based PAYD packages to drive Canada UBI market growth

Global UBI Market

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In Canada, the PAYD usage-based insurance market is expected to garner a revenue of more than USD 300 million by 2027 growing at a CAGR of around 20% as it focuses on monitoring the miles driven and pricing policies based on mileage. The supportive initiative from Canadian automotive associations to promote vehicle safety is supporting the market outlook. In July 2018, the Canadian Automobile Association (CAA) introduced a new auto insurance program, CAA MyPace for infrequent drivers, letting drivers pay for every 1,000 km they drive. The new program helped to modernize insurance in Ontario by enabling motorists to monitor how much they drive and pay for insurance based on that mileage.
 

Increasing connected cars demand in the UK is spurring the embedded telematics technology usage

UK UBI Market

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In the UK, embedded telematics segment held above 5% of the usage-based insurance market share in 2020 on account of the capability of embedded telematics solutions to gather massive volumes of data on car usage patterns, maintenance needs, and performance. With the growth of connected cars, the demand for built-in embedded systems will increase. These systems do not rely on external devices, eliminating interoperability issues that can arise led by the use of brought-in devices. Built-in systems thus offer more flexibility to the OEM’s business model and provide strong connections to services demanded by consumers such as navigation and on-board infotainment.
 

Growing focus on passenger safety is fueling the demand for UBI solutions across passenger vehicles

The passenger vehicles sector in China is poised to witness a growth rate of around 20% CAGR through 2027 propelled by the growing emphasis on passenger safety in vehicles. The use of built-in or brought-in telematics devices in passenger vehicles enables drivers to monitor vehicle parameters in real-time and improve service areas such as navigation, information, and safety. Passenger vehicles offer the most common e mode of travel and are likely to witness a surge in market demand, accelerating the need for telematics devices. A significant shift in the sale and production of passenger vehicles will augment the demand for UBI solutions across passenger vehicles.
 

Rising adoption of telematics is propelling the Asia Pacific UBI market revenue

Asia Pacific UBI Market

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Asia Pacific held a market share of more than 15% of the usage-based insurance market in 2020 impelled by the increasing demand for automotive telematics in the region. The government authorities are advocating the use of automobile insurance that leverages telematics technologies as a means of reducing the number of accidents. Consequently, automakers and IT companies are engaged in a lively competition for technological developments. The growing smartphone and telematics adoption in major countries including India and China is another factor boosting the market growth.  Increasing government initiatives toward vehicle safety & security are projected to support the demand for UBI solutions in the region.
 

New product development is the key market strategy adopted by the leading industry players

Major participants operating in the UBI industry are focusing on the development of new UBI solutions to strengthen their position in the market. For instance, in March 2021, Hyundai Motor America introduced the Usage Based Insurance (UBI) program to promote safe & secure driving practices among the drivers. This new UBI solution helped the company to offer greater control over insurance costs to vehicle owners. This also helped the company to enhance safe on-road driving practices.
 

Some of the major usage-based insurance market players are Allianz SE, Allstate Insurance Company, ASSICURAZIONI GENERALI S.P.A., AVIVA Plc, AXA, Cambridge Mobile Telematics, Danlaw, Inc., Desjardins Group, Insure The Box Limited, Intelligent Mechatronic Systems Inc., Liberty Mutual Insurance, Mapfre, S.A., Metromile Inc., Nationwide, Octo Technology, Progressive Casualty Insurance Company, Sierra Wireless, State Farm Mutual Automobile Insurance Company,  TomTom International BV, UnipolSai Assicurazioni S.p.A., Verizon Communication Inc., Vodafone Automotive SpA, and Zubie, Inc.
 

This market research report on UBI includes in-depth coverage of the industry with estimates & forecast in terms of revenue in USD from 2016 to 2027 for the following segments:

Market, By Package

  • PHYD
  • PAYD
    • Device-based
    • Telematics-based

Market, By Technology

  • OBD-II
  • Smartphone
  • Black Box
  • Embedded Telematics

Market, By Vehicle Type

  • Passenger Vehicle
  • Commercial Vehicle

The above information has been provided for the following regions and countries:

  • North America
    • U.S.
    • Canada
  • Europe
    • UK
    • Germany
    • France
    • Spain
    • Italy
    • Austria
    • Netherlands
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • Thailand
    • Malaysia
  • Latin America, Middle East & Africa
    • Brazil
    • Mexico
    • UAE
    • Qatar
    • Colombia
    • South Africa
    • Saudi Arabia

 

Frequently Asked Questions (FAQ) :

Usage-based Insurance market size has surpassed USD 30 billion in 2020 and will record a CAGR of over 20% through 2027.
PAYD usage-based insurance market in Canada will register a valuation of over USD 300 million by 2027 owing to favorable initiative from Canadian automotive associations to promote vehicles safety.
Embedded telematics segment in the UK had captured over 5% market share in 2020 owing to its capability to collect massive volumes of data on car usage patterns, maintenance needs, and performance.
Passenger vehicles sector in China will register a CAGR of around 20% through 2027 with growing emphasis on passenger safety in vehicles along with the application of built-in or brought-in telematics devices in passenger vehicles.
Asia Pacific usage-based insurance market had held more than 15% share in 2020 owing to rising demand for automotive telematics in the region.

Premium Report Details

  • Published Date: May 2021
  • Pages: 285
  • Tables: 349
  • Charts / Figures: 32
  • Companies covered: 30
  • Countries covered: 20

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