Usage Based Insurance (Ubi) Market Overview
Usage Based Insurance (Ubi) Market Size was estimated at 43.52 (USD Billion) in 2022.The Usage Based Insurance (Ubi) Market Industry is expected to grow from 48.92(USD Billion) in 2023 to 140.1 (USD Billion) by 2032. The Usage Based Insurance (Ubi) Market CAGR (growth rate) is expected to be around 12.4% during the forecast period (2024 - 2032).
Key Usage Based Insurance (Ubi) Market Trends Highlighted
The Usage-Based Insurance (UBI) market is witnessing significant growth due to the increasing adoption of telematics and connected vehicles. The integration of technology allows insurers to track and analyze vehicle usage data, enabling them to offer personalized and risk-adjusted insurance premiums. The key market drivers include the rising demand for pay-as-you-drive policies, governmental mandates promoting safer driving, and advancements in IoT and data analytics.
Recent trends in the UBI market include the expansion of coverage beyond traditional metrics like mileage and speed to incorporate factors such as driver behavior and vehicle maintenance. Additionally, there is a growing focus on usage-based insurance as a means to incentivize safer driving behaviors, potentially reducing accidents and claims. Insurers are also exploring collaborations with ride-sharing companies and other mobility providers to offer UBI policies tailored to the specific needs of these sectors.
Source Primary Research, Secondary Research, MRFR Database and Analyst Review
Usage Based Insurance (Ubi) Market Drivers
Increasing Adoption of Telematics and IoT Devices
A crucial driver of the Usage Based Insurance Market Industry is the increasing adoption of telematics and Internet of Things devices in vehicles. As the Insurance Information Institute has defined, "telematics devices [allow] auto insurers to track driving behavior, such as speed, acceleration, braking and location." This information can now be utilized by insurance companies to create personal, vehicle-specific insurance policies that reflect the precise risk for every specific driver.
However, sensors and cameras tracking mileage, maintenance, and repairs can also be classified as the Internet of Things devices. This means that the rapidly growing adoption of telematics and the Internet of Things will also drive the growth of the Usage Based Insurance (UBI) Market Industry in the forthcoming years.
Rising Demand for Personalized Insurance Products
Consumers are increasingly demanding personalized insurance products that meet their specific needs. Usage-based insurance policies are attractive to consumers because they offer the potential for lower premiums and more tailored coverage. Insurers are responding to this demand by developing a wider range of usage-based insurance products. For example, some insurers now offer usage-based insurance policies that are tailored to specific types of vehicles, such as motorcycles, trucks, and RVs.
Other insurers offer usage-based insurance policies that are tailored to specific driving habits, such as low-mileage drivers and safe drivers. The rising demand for personalized insurance products is expected to continue to drive the growth of the Usage Based Insurance (Ubi) Market Industry in the coming years.
Government Regulations and Incentives
In addition to this, government regulations and incentives are also driving the usage-based insurance market industry. In many countries, governments have passed regulations that require insurers to offer usage-based policies. In other countries, governments have passed incentives, such as tax breaks and subsidies, to incentivize consumers to adopt usage-based policies. In the coming years, these government regulations and incentives are expected to continue driving the Usage Based Insurance (Ubi) Market.
Usage Based Insurance (Ubi) Market Segment Insights
Usage Based Insurance (Ubi) Market Vehicle Type Insights
Introduction The Usage Insurance Market is segmented by Vehicle Type into Passenger Cars, Commercial Vehicles, 2-wheelers, Motorcycles, Scooters, and Telematics Fleet Management Devices. Among these segments, the passenger cars segment accounted for the largest revenue share in 2023 and is believed to dominate the market during the forecast period. The increasing adoption of UBI programs by insurance companies is the major factor that is expected to expand the growth of the passenger cars segment. Moreover, the rising implementation of connected cars is also expected to attract insurance companies towards the use of UBI programs.
However, the Commercial Vehicles segment is estimated to grow at a significant rate over the forecast period owing to the adoption of telematics and fleet management devices amongst commercial vehicles. These devices provide significant data about the usage of the vehicles, which helps the company design more accurate and personalized insurance policies for the vehicle. Additionally, the assisted and autonomous driving features that are now offered in abundance, even in average cars, will further complement the growth of the market. Thus, the 2-wheelers segment is likely to grow at a decent pace owing to the growing popularity of ride-sharing services and the expanding adoption of electric scooters.
The Telematics Fleet Management Devices segment is likely to grow at a constant pace, owing to the continuous improvement in such devices along with decreasing prices. In the case of regional markets, the European region is expected to grow at a significant rate owing to the strict regulations passed by the government of the region that support the implementation of UBI programs. The key factors that are driving the growth of the market are the increasing adoption of UBI programs by insurance companies, the rising implementation of connected cars, and the expansion of telematics and fleet management devices.
Source Primary Research, Secondary Research, MRFR Database and Analyst Review
Usage Based Insurance (Ubi) Market Data Source Insights
On-Board Diagnostics (OBD), Smartphone Telematics, Vehicle Telematics, and Collision Detection Devices are the key data sources for Usage Based Insurance (UBI). OBDs offer real-time insights into vehicle performance data by monitoring parameters like speed, mileage, and acceleration. Smartphone Telematics uses smartphone sensors to collect data on driving behavior, such as braking patterns, cornering forces, and phone usage while driving. Vehicle Telematics involves installing a dedicated device in the vehicle to gather comprehensive data, including GPS tracking, vehicle diagnostics, and driver behavior.
Collision Detection Devices focus on detecting and recording impact events, providing valuable data for accident reconstruction and insurance claims processing. The Usage Based Insurance (UBI) Market segmentation by Data Source enables insurers to tailor policies and pricing based on individual driving patterns, leading to more personalized and risk-adjusted premiums.
Usage Based Insurance (Ubi) Market Pricing Model Insights
The Usage Based Insurance (Ubi) Market is segmented based on Pricing Model into Pay-As-You-Drive (PAYD), Mileage-Based Insurance, Behaviour-Based Insurance (BBI), and Ride-and-Drive-Sharing. Among these, the Pay-As-You-Drive (PAYD) segment held the largest market share in 2023, accounting for around 40% of the Usage Based Insurance (Ubi) Market revenue. This is primarily attributed to the increasing adoption of PAYD insurance policies by consumers seeking to reduce their insurance premiums by paying only for the miles they drive. The Mileage-Based Insurance segment is expected to witness significant growth during the forecast period, owing to the rising popularity of telematics devices and the growing awareness of the benefits of usage-based insurance among consumers.
Behaviour-Based Insurance (BBI) is another segment that is gaining traction in the Usage Based Insurance (Ubi) Market. BBI policies reward drivers for safe driving behavior, such as maintaining a certain speed limit, avoiding harsh braking, and taking fewer turns by offering discounts on their insurance premiums. The Ride-and-Drive-Sharing segment is expected to experience moderate growth in the coming years, driven by the increasing popularity of ride-sharing and car-sharing services.
Usage Based Insurance (Ubi) Market Coverage Insights
The Coverage segment of the Usage Based Insurance (UBI) Market is expected to witness significant growth in the coming years. In 2024, the Collision and Comprehensive Insurance segment is projected to account for the largest share of the market, followed by Liability Insurance. Home Emergency Assistance and Extended Warranty are expected to grow at a rapid pace, driven by increasing consumer demand for personalized and value-added services. The Usage Based Insurance (UBI) Market is anticipated to reach a valuation of USD 49.7 Billion in 2024, expanding at a CAGR of 12.8%.
By 2032, the market is expected to reach a valuation of USD 145.4 Billion. The increasing adoption of UBI by insurers due to its benefits such as risk assessment, personalized pricing, and fraud reduction is driving the market growth.
Usage Based Insurance (Ubi) Market Distribution Channel Insights
The Usage Based Insurance (UBI) Market segmentation by Distribution Channel comprises Insurance Companies, Third-Party Insurers (TPAs), OEMs and Fleet Management Providers, and Insurance Brokers and Agents. Insurance Companies hold the dominant position in the market, capturing over 60% of the revenue in 2023. Their extensive customer base, strong brand recognition, and established distribution networks contribute to their dominance. TPAs are projected to witness significant growth, driven by their expertise in managing large-scale insurance programs and offering customized solutions.
OEMs and Fleet Management Providers are actively partnering with insurance companies to offer integrated UBI solutions, leveraging their access to vehicle data and telematics capabilities. Insurance Brokers and Agents play a crucial role in educating customers about UBI and facilitating policy distribution, contributing to the overall market growth.
Usage Based Insurance (Ubi) Market Regional Insights
The regional segmentation of the Usage Based Insurance (UBI) market offers valuable insights into the performance and growth prospects of the industry across different geographic regions. North America, with its advanced insurance infrastructure and early adoption of telematics and connected car technologies, is projected to hold a significant market share in 2024 and continue to dominate the market in the coming years. Europe, characterized by a high penetration of premium vehicles and increasing regulatory support for UBI programs, is also expected to contribute a sizable share to the Usage Based Insurance (Ubi) Market revenue.
The Asia-Pacific region, driven by the rapidly growing automotive industry and rising consumer awareness of UBI benefits, is poised for robust growth and is expected to emerge as a key market in the near future. South America, the Middle East, and Africa (MEA) regions, while currently accounting for a smaller market share, are anticipated to witness steady growth in the coming years, supported by government initiatives and increasing adoption of connected vehicle technologies. These regional insights provide a comprehensive understanding of the market dynamics and help stakeholders make informed decisions for business expansion and investment strategies.
Source Primary Research, Secondary Research, MRFR Database and Analyst Review
Usage Based Insurance (Ubi) Market Key Players And Competitive Insights
Major players in the Usage Based Insurance (Ubi) Market industry are focusing on developing innovative products and services to cater to the evolving needs of customers. Leading Usage Based Insurance (Ubi) Market players are also investing in research and development to enhance their offerings and gain a competitive edge in the market. The Usage Based Insurance (Ubi) Market is expected to witness significant development in the coming years, driven by the increasing adoption of telematics devices and the rising demand for personalized insurance solutions.
A leading player in the Usage Based Insurance (Ubi) Market is Progressive Insurance. The company offers a variety of Usage Based Insurance (Ubi) programs that allow customers to save money on their insurance premiums by tracking their driving habits. Progressive Insurance has a strong track record of innovation and has been a pioneer in the development of Usage Based Insurance (Ubi) products. The company has a large customer base and a well-established brand, which gives it a competitive advantage in the market.
A competitor of Progressive Insurance in the Usage Based Insurance (Ubi) Market is Metromile. Metromile offers a pay-per-mile insurance program that allows customers to pay for their insurance based on the number of miles they drive. Metromile's pay-per-mile program is a unique offering in the market and has attracted a significant number of customers. The company has a strong focus on customer service and has received positive reviews from its customers. Metromile is a growing company and is expected to continue to be a major player in the Usage Based Insurance (Ubi) Market in the coming years.
Key Companies in the Usage Based Insurance (Ubi) Market Include
- Metromile
- Farmers
- The Zebra
- Allstate
- Flo
- Arity
- Liberty Mutual
- AXA
- Insurify
- Driveway
- State Farm
- Cambridge Mobile Telematics
- Octo Telematics
- Mile Auto
Usage Based Insurance (Ubi) Market Industry Developments
Key developments in the market include partnerships between insurers and automakers to offer UBI programs, the development of UBI solutions for commercial vehicles, and the expansion of UBI programs to new regions. For instance, in 2023, AXA partnered with Toyota to launch a UBI program in Europe, which offers personalized insurance premiums based on driving behavior. These developments are expected to fuel market growth in the coming years.
Usage Based Insurance (Ubi) Market Segmentation Insights
Usage Based Insurance (Ubi) Market Vehicle Type Outlook
- Passenger Cars
- Commercial Vehicles (LCV and HCV)
- 2-Wheelers (Motorcycles and Scooters)
- Telematics Fleet Management Devices
Usage Based Insurance (Ubi) Market Data Source Outlook
- On-Board Diagnostics (OBD)
- Smartphone Telematics
- Vehicle Telematics
- Collision Detection Devices
Usage Based Insurance (Ubi) Market Pricing Model Outlook
- Pay-As-You-Drive (PAYD)
- Mileage-Based Insurance
- Behaviour-Based Insurance (BBI)
- Ride-and-Drive-Sharing
Usage Based Insurance (Ubi) Market Coverage Outlook
- Collision and Comprehensive Insurance
- Liability Insurance
- Home Emergency Assistance
- Extended Warranty
Usage Based Insurance (Ubi) Market Distribution Channel Outlook
- Insurance Companies
- Third-Party Insurers (TPAs)
- OEMs and Fleet Management Providers
- Insurance Brokers and Agents
Usage Based Insurance (Ubi) Market Regional Outlook
- North America
- Europe
- South America
- Asia Pacific
- Middle East and Africa
| Report Attribute/Metric |
Details |
| Market Size 2022 |
43.52(USD Billion) |
| Market Size 2023 |
48.92(USD Billion) |
| Market Size 2032 |
140.1(USD Billion) |
| Compound Annual Growth Rate (CAGR) |
12.4% (2024 - 2032) |
| Report Coverage |
Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
| Base Year |
2023 |
| Market Forecast Period |
2024 - 2032 |
| Historical Data |
2019 - 2023 |
| Market Forecast Units |
USD Billion |
| Key Companies Profiled |
Metromile, Farmers, The Zebra, Allstate, Flo, Arity, Liberty Mutual, AXA, Insurify, Driveway, State Farm, Cambridge Mobile Telematics, Octo Telematics, Mile Auto |
| Segments Covered |
Vehicle Type, Data Source, Pricing Model, Coverage , Distribution Channel , Regional |
| Key Market Opportunities |
Key Market Opportunities in UsageBased Insurance UBI Market PayAsYouDrive Policies DataDriven Customization  Fleet Telematics Expansion  Risk Mitigation for Insurers  Personalization and Gamification |
| Key Market Dynamics |
Rising demand for personalized insurance policies  Technological advancements in telematics devices  Increasing adoption of connected vehicles  Growing awareness of the benefits of UBI Government initiatives to promote UBI adoption |
| Countries Covered |
North America, Europe, APAC, South America, MEA |
Frequently Asked Questions (FAQ) :
The Usage Based Insurance (UBI) Market is expected to reach a valuation of USD 48.92 billion in 2023.
The Usage Based Insurance (UBI) Market is expected to grow at a CAGR of 12.4% from 2024 to 2032.
The Usage Based Insurance (UBI) Market is expected to reach a valuation of USD 140.1 billion by 2032.
North America is expected to hold the largest share of the Usage Based Insurance (UBI) Market throughout the forecast period.
The passenger cars segment is expected to hold the largest share of the Usage Based Insurance (UBI) Market throughout the forecast period.
Some of the key competitors in the Usage Based Insurance (UBI) Market include Progressive Insurance, Allstate Insurance, State Farm Insurance, and Metromile.
The key factors driving the growth of the Usage Based Insurance (UBI) Market include the increasing adoption of telematics devices, the rising demand for personalized insurance products, and the growing awareness of the benefits of UBI.
The key challenges faced by the Usage Based Insurance (UBI) Market include the lack of standardized regulations, the privacy concerns associated with telematics data, and the high cost of implementing UBI programs.
The key trends in the Usage Based Insurance (UBI) Market include the increasing adoption of smartphone-based UBI programs, the development of new UBI products and services, and the growing use of AI and machine learning in UBI.
The future outlook of the Usage Based Insurance (UBI) Market is positive. The market is expected to continue to grow at a steady pace over the next decade, driven by the increasing adoption of telematics devices, the rising demand for personalized insurance products, and the growing awareness of the benefits of UBI.
