U.S., Italy, and U.K are leading the automotive usage based insurance market
The global automotive usage based insurance market accounted for US$ 15.62 Bn in 2018 and is estimated to reach US$ 105.12 Bn in 2027. In the current automotive insurance industry, the UBI or telematics insurance is at a nascent stage, as very few countries have adopted the technology heavily. The automotive insurance companies are increasingly partnering with telematics companies to expand their telematics insurance or UBI segment in the current market scenario and also for the future. Additionally, several companies operating in the global automotive usage based insurance market is continuously taking initiatives to attract consumers with various attractive policies and technologies. The automotive usage based insurance market is highly fragmented as the industry is captured by several well-established players as well as emerging players across the globe. From the investment scenario, the insurance companies and the telematics companies operating in the developing countries, as well as developed countries, are scoring significant investments, which is helping the UBI market to witness the upswing in the recent times. The governments of several countries are simplifying their insurance legislation, which is another factor driving the automotive usage based insurance market.
U.S., Italy and the U.K. are matured automotive usage based insurance market, owing to which North America led the market followed by Europe. The dominance of North America in the global UBI market is due to the fact that, the country houses a large number of automotive OEMs, telematics companies, and insurance companies. Additionally, the trend of adoption of newer technologies and solutions is also high in the country, which has pushed the residents to opt for telematics insurance. Moreover, the region is one of the precursors of mobility-as-a-service (MaaS), and the MaaS market has propelled extensively over the years in the region and is also continually witnessing upward trends. Further, owing to the higher disposable income among the individuals, the pattern of procurement of new vehicles is high in the country. Pertaining to the rise in the number of vehicles, several associated technologies and solutions are also increasing rapidly in the U.S. These factors have positively impacted on the growth of the automotive usage based insurance market in the U.S.
On the other hand, European countries namely; Italy, the U.K. and Germany have immensely shown interest in procuring UBI policy in recent years. Italy ranked 1st in the list of adoption of UBI policies in Europe. In the recent time, every vehicle in Italy is integrated with telematics technologies, which has eased the insurance companies to introduce UBI or telematics insurance in the country. Similarly, in the U.K., the insurance companies witnessed favorable trends in initiating UBI. Germany, on the other hand, lagged in adopting telematics insurance, despite being an automotive manufacturing leader. However, the insurance providers in Europe and internationally, have started introducing the telematics insurance products and the same are experiencing a steady growth rate in recent years. The Asia Pacific is estimated to be the fastest growing region in the global automotive usage based insurance market during the forecast period from 2019 – 2027. This is majorly due to the significant adoption of the same in countries such as Singapore, India, Malaysia, and Japan among others. The number of vehicles in the countries are continually increasing, and the adoption of telematics is also rising in the current scenario. These two factors are enabling insurance companies to introduce their telematics insurance products in these countries.