IMARC Group's report titled " Usage-Based Insurance Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2024-2032", offers a comprehensive analysis of the industry, which comprises insights on the global usage-based insurance market share. The global market size reached US$ 51.4 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 307.6 Billion by 2032, exhibiting a growth rate (CAGR) of 21.3% during 2024-2032.
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Factors Affecting the Growth of the Usage-Based Insurance Industry:
- Advancements in Telematics Technology:
Telematics involves the collection and transmission of real-time data from vehicles to insurers, enabling a deeper understanding of driver behavior. In addition, a global positioning system (GPS), accelerometers, and other sensors in vehicles provide vast information, such as speed, acceleration, braking, and the time of day of a vehicle. This data allows insurers to personalize insurance premiums based on individual driving habits. Apart from this, technological advancements benefit in improving the accuracy of risk assessment, reducing the chances of fraudulent claims, and enabling insurers to better tailor their offerings.
- Rising Need for Cost-Effective Solutions:
The increasing adoption of usage-based insurance (UBI), as it is cost-effective for both insurers and policyholders, is propelling the growth of the market. In line with this, insurers can benefit from UBI programs by gaining access to real-time data on driver behavior. This data allows them to accurately assess risk, identify safe drivers, and reduce fraudulent claims. Furthermore, insurers can offer lower premiums to safe drivers by having a clearer understanding of individual risk profiles. Besides this, safe driving behaviors, such as obeying speed limits, avoiding hard braking, and driving during less congested times, can lead to savings on insurance premiums.
- Increasing Adoption of Connected Vehicles:
The rising adoption of connected vehicles that are equipped with telematics systems is bolstering the growth of the market. In addition, telematic systems can collect and transmit a wide range of data related to driving behavior. Apart from this, connected vehicles simplify the enrollment process for UBI, as policyholders do not need to install additional hardware or devices in their cars. This convenience encourages more drivers to participate in UBI programs. Furthermore, key insurers are refining their pricing models and offering even more personalized premiums.
Leading Companies Operating in the Global Usage-Based Insurance Industry:
- Aioi Nissay Dowa Insurance UK Ltd
- Allianz SE
- Allstate Insurance Company
- American International Group Inc.
- Assicurazioni Generali S.p.A.
- AXA
- Liberty Mutual Insurance Company
- Mapfre S.A.
- Progressive Casualty Insurance Company
- State Farm Automobile Mutual Insurance Company
- TomTom International BV.
- UnipolSai Assicurazioni S.p.A. (Unipol Gruppo S.p.A)
Usage-Based Insurance Market Report Segmentation:
By Type:
- Pay-As-You-Drive (PAYD)
- Pay-How-You-Drive (PHYD)
- Manage-How-You-Drive (MHYD)
- Others
Pay-as-you-drive (PAYD) represents the largest segment as it allows policyholders to pay premiums based on the distance driven.
By Technology:
- OBD II
- Black Box
- Smartphones
- Others
Black box holds the biggest market share, which can be attributed to the rising demand for enhanced transparency.
By Vehicle Type:
- Light-duty Vehicle (LDV)
- Heavy-duty Vehicle (HDV)
Light-duty vehicle (LDV) accounts for the largest market share on account of the escalating demand for cost-effective and reliable insurance solutions.
By Vehicle Age:
- New Vehicles
- Used Vehicles
New vehicles exhibit a clear dominance in the market due to increasing preferences for personalized insurance solutions.
Regional Insights:
- North America: (United States, Canada)
- Asia Pacific: (China, Japan, India, South Korea, Australia, Indonesia, Others)
- Europe: (Germany, France, United Kingdom, Italy, Spain, Russia, Others)
- Latin America: (Brazil, Mexico, Others)
- Middle East and Africa
North America enjoys the leading position in the usage-based insurance market, which can be accredited to the rising adoption of advanced technologies for accurate data collection and seamless user experiences.
Global Usage-Based Insurance Market Trends:
The increasing utilization of advanced data analytics and artificial intelligence (AI) algorithms is propelling the growth of the market. Moreover, insurers are leveraging these technologies to analyze telematics data more effectively. This allows for enhanced risk assessment, the identification of emerging trends, and the development of more precise pricing models. The rising awareness among individuals about UBI programs is impelling the market growth. Besides this, people are becoming more informed about the cost-saving opportunities associated with UBI and are willing to share their driving data, which is bolstering the market growth.
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