Automotive Usage Based Insurance Market Trends and Analysis by 2027

The automotive usage based insurance market was valued at US$ 19.64 billion in 2019 and is expected to reach US$ 124.02 billion by 2027; it is estimated to grow at a CAGR of 26.0% during 2020–2027.

The matured markets in global automotive usage based insurance market accounted for the US, Italy and the UK, owing to which North America led the market followed by Europe. The dominance of North America in the global automotive usage based insurance market is attributed to the presence of large number of automotive OEMs, telematics companies, and insurance companies in the region. Additionally, rising adoption of newer technologies and solutions has pushed the residents to opt for telematics insurance. Moreover, the region is one of the precursors of mobility-as-a-service (MaaS) across the world, and the MaaS market has propelled extensively over the years in the region and is continually witnessing upward trends. Further, owing to a higher disposable income among the individuals, the pattern of procurement of new vehicles is rising in the region. With the rising number of vehicles, several associated technologies and solutions are also increasing rapidly in the US. These factors have positively impacted the growth of the usage based insurance market in the US.

Rise in the adoption of internet-connected devices and sensors is resulting in the obtainability of real-time information thus, giving insurers an opportunity to have an advantage over the competition. The data collected is further utilized to offer better underwriting, affordable prices, and loss control. Additionally, improvements in artificial intelligence techniques enable insurers to take decisions based on technology as a means of processing data. Further, implementation of blockchain technology can offer insurers with opportunities to provide new products, enhance fraud detection, and minimize administrative costs.

Impact of COVID-19 Pandemic on Automotive Usage Based InsuranceMarket

Due to the outbreak of COVID-19, the count of car trips has dropped drastically across the world. Therefore, the drivers and the vehicle owners are seeking for different criteria for making payment of insurance instead of making a flat rate, as the cars have been parked idle in the garages since last few months. Due to reduced trips of vehicles, the usage-based insurance is expected to be adopted highly. Thus, the companies are carefully monitoring the driving behavior because of restrictions imposed to curb the spread of COVID-19. To encourage safe driving in this pandemic situation, the need to measure the user's driving behavior is a must. This pandemic situation would assist in stimulating the use of telematics more in the auto insurance industry..

Published Report - Automotive Usage Based Insurance Market: Strategic Insights

Market Insights–Automotive Usage Based InsuranceMarket 

The increasing traction of Mobility-as-a-Service (MaaS) among the consumers is leading the third party service providers to procure increased count of vehicles so as to enhance the customer experience. This factor is also increasing the number of service providers across the globe; some of the prominent mobility-as-a-service providers are Uber, Lyft, Zipcar, Car2go, Beeline Singapore, UbiGo AB, and Smile Mobility, among others.The increasing procurement of vehicles by these vehicle service providers is a crucial factor influencing the market for telematics technology providers (TTP), telematics service providers (TSP), and auto insurers across the globe. With the rise in MaaS in these geographies, there has been a remarkable rise in the number of young drivers, who indulge themselves in rash driving causing fatal accidents. With an objective to reduce vehicle accidents, several telematics providers and insurance companies are partnering with each other to introduce advanced, robust, and attractive insurance solutions, thereby, pacing up the telematics insurance or automotive usage based insurance market in the current scenario.

Technology Fitted-Based Insights–Automotive Usage Based InsuranceMarket

At present, the insurance providers are following either installation of hardware devices, where devices are equipped to the policyholders’ cars or the low-priced smartphone app route.Most of the insurance providers use on-board diagnostics systems or dongles. However, other providers offer smartphone apps that are easier to access and are economical.

Policy Type-BasedInsights–Automotive Usage Based Insurance Market

Automotive usage based insurance utilizes actual driver data for calculating the premiums, which are more discrete and precise than traditional methods. This helps in potential savings to the customers. The two basic types of automotive UBI are pay-as-you-drive (PAYD) and pay-how-you-drive (PHYD). Each of these types are analyze slightly different information to determine premium rates for customers.

The automotive usage based insurancemarket players focus on product innovations and developments by integrating advanced technologies and features in their products to compete with the competitors.

• In 2020, Amerisure and Insurance & Mobility Solutions collaborated for a commercial fleet UBI telematics program in Michigan. The program will lead to create a powerful impact in reducing losses and keeping business owners encouraged to take part in the program and make changes in their fleets

• In 2020, Liberty Mutual Insurance collaborated with Ford to provide driving discounts to the customers of Liberty Mutual who drives Ford connected vehicles. This will make it convenient for customers to save money on auto insurance and have safe driving

Automotive Usage Based Insurance

Published Report - Automotive Usage Based Insurance Market Players Density: Understanding Its Impact on Business Dynamics

The Published Report - Automotive Usage Based Insurance Market is growing rapidly, driven by increasing end-user demand due to factors such as evolving consumer preferences, technological advancements, and greater awareness of the product's benefits. As demand rises, businesses are expanding their offerings, innovating to meet consumer needs, and capitalizing on emerging trends, which further fuels market growth.

Automotive Usage Based Insurance Market – By Technology Fitted

•      Smartphones
•      Black Box
•      Dongles
•      Others

Automotive Usage Based Insurance Market – By Policy Type

• Pay-As-You-Drive (PAYD)
• Pay-How-You-Drive (PHYD)

Automotive Usage Based Insurance Market –Companies Profiles

• Allstate Insurance Company
• AXA SA
• Allianz SE
• Metromile, Inc.
• Ingenie Services Limited
• Liberty Mutual Insurance Company
• Octo Telematics S.p.A
• Sierra Wireless, Inc.
• TomTom Telematics BV
• Vodafone Automotive