Global Usage-based Insurance for Automotive Market Size to worth USD 480.82 Billion by 2033: Forecast Analysis Report

Global Usage-based Insurance for Automotive Market Size to worth USD 480.82 Billion by 2033

According to a research report published by Spherical Insights & Consulting, the Global Usage-based Insurance for Automotive Market Size is Expected to Grow from USD 60.72 Billion in 2023 to USD 480.82 Billion by 2033, at a CAGR of 22.99 % during the forecast period 2023-2033. 

Browse key industry insights spread across 210 pages with 110 Market data tables and figures & charts from the report on the Global Usage-based Insurance for Automotive Market Size, Share, and COVID-19 Impact Analysis, By Type (PAYD, PHYD, and MHYD), By Technology (Black Box and Smartphones), and By Region (North America, Europe, Asia-Pacific, Latin America, Middle East, and Africa), Analysis and Forecast 2023 – 2033.          

Usage-based Insurance (UBI) for automotive market is a dynamic segment within the automotive insurance industry that employs technology to adjust premiums based on the individual usage patterns of a vehicle. UBI systems collect data through telematics devices embedded in vehicles, which monitor factors such as mileage, driving behavior, and road conditions. This data is then used to personalize insurance premiums, offering a more tailored and potentially cost-effective option for consumers. The market is driven by increasing consumer demand for more personalized insurance products, advancements in telematics technology, and the growing adoption of connected vehicles. Furthermore, the rise in environmental awareness has led to an increased interest in promoting safe and efficient driving, which can be incentivized through UBI. However, challenges such as privacy concerns regarding the data collected, regulatory hurdles, and the relatively slow adoption of telematics systems by some insurers and consumers are restraining market growth.

The PAYD segment accounted for the highest share in 2023 and is expected to grow at a significant CAGR during the forecast period.    

Based on the type, the usage-based insurance for automotive market is divided into PAYD, PHYD, and MHYD. Among these, the PAYD segment accounted for the largest share in 2023 and is expected to grow at a significant CAGR during the forecast period. This segment accounted for over half of the global UBI market revenue, driven by its appeal to consumers who prefer premiums based on the distance driven.

The black box segment accounted for the largest share in 2023 and is expected to grow at a significant CAGR during the forecast period.

Based on the technology, the usage-based insurance for automotive market is classified into black box and smartphones. Among these, the black box segment accounted for the largest share in 2023 and is expected to grow at a significant CAGR during the forecast period. The OBD-II system, commonly known as the black box, is a device installed in vehicles to monitor driving behavior, including speed, acceleration, and braking patterns.

Asia-Pacific is estimated to hold the greatest usage-based insurance for automotive market share over the forecast period.

Asia-Pacific is estimated to hold the greatest usage-based insurance for automotive market share over the forecast period. The rapid proliferation of mobile connectivity and smartphone technologies in the region is anticipated to spur the adoption of usage-based insurance services. There has also been a sharp growth in the sales of passenger cars and commercial vehicles in economies such as China and India, owing to higher disposable incomes and improved standards of living, which has highlighted the need for launching solutions that can encourage safe driving practices, leading to regional market expansion. Government policies and regulatory approvals are further expected to play an important role in the introduction of innovative solutions in this market.

Europe is predicted to have the fastest CAGR growth in the usage-based insurance for automotive market over the forecast period. The well-established telematics infrastructure in the region and extensive integration of digital technologies in vehicles have provided various growth opportunities for the regional market. As published by the European Commission in 2023, investments of around USD 189 billion have been invested in technologies containing AI, robotics, and new materials, and 28 projects were shortlisted in March 2023. The UBI companies have incorporated advanced technology to collect data on driver behavior and quote premiums based on this data.

Competitive Analysis

Major key players in the usage-based insurance for automotive market are Allstate Insurance Company, Allianz, American International Group, Inc., AXA, Assicurazioni Generali S.p.A., insurethebox, Liberty Mutual Insurance, MAPFRE, Progressive Casualty Insurance Company, State Farm Mutual Automobile Insurance Compan., and others.

Key Target Audience

• Market Players
• Investors
• End-users
• Government Authorities 
• Consulting And Research Firm
• Venture capitalists
• Value-Added Resellers (VARs)

Recent Developments

• In April 2024, Allstate announced results from research conducted in partnership with Arity, a mobile data and analytics company, highlighting the benefits of using its Drivewise application for vehicles. These findings are part of the 16th ‘Allstate America's Best Drivers Report’ and stated that customers using Drivewise reduce the likelihood of them having a severe collision by 25% when compared to those who do not use this feature. The user-based insurance solution offers feedback regarding safe driving to users after every trip, enabling savings on their policy.

Market Segment

This study forecasts global, regional, and country revenue from 2023 to 2033. Spherical Insights has segmented the usage-based insurance for automotive market based on the below-mentioned segments:

Global Usage-based Insurance for Automotive Market, By Type

• PAYD
• PHYD
• MHYD

Global Usage-based Insurance for Automotive Market, By Technology

• Black Box
• Smartphones

Global Usage-based Insurance for Automotive Market, By Regional Analysis

• North America
  • US
  • Canada
  • Mexico
• Europe
  • Germany
  • UK
  • France
  • Italy
  • Spain
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Rest of Asia Pacific
• South America
  • Brazil
  • Argentina
  • Rest of South America
• Middle East & Africa
  • UAE
  • Saudi Arabia
  • Qatar
  • South Africa
  • Rest of the Middle East & Africa