Usage-based Insurance (UBI) Market Size

Usage-based Insurance Market Size

Usage-based Insurance Market size exceeded USD 45 billion in 2022 and is projected to expand at more than 23.5% CAGR from 2023 to 2032. The rapid proliferation of in-car technologies and the remarkable surge in connected cars are set to accelerate customer inclination toward usage-based insurance.

Usage-based Insurance (UBI), also referred to as Pay How You Drive (PHYD) and Pay As You Drive (PAYD), is an alternative offered by auto insurance providers, where the costs depend on the type of vehicle used, measured against distance, behavior, time, and place. This allows drivers to earn rewards based on their skills, resulting in cheaper insurance costs, thus creating favorable growth prospects for the UBI industry.

In addition, several insurance firms have been associating themselves with AI and IoT-based software providers to develop appropriate telematics software applications to track user data and make personalized insurance quotes, further strengthening the industry outlook. For instance, in February 2021, My Policy Group, a data analytics-based motor insurance provider in the UK, partnered with Zurich Group, a connected vehicle & telematics solution provider, to bolster its capabilities in connected cars.