Electric Vehicle UBI Market: Introduction
- Factors such as lower insurance premium compared to regular insurance, government regulations on telematics, high adoption of connected car services, and growing trends towards electric vehicles during the forecast period are expected to drive the global electric vehicle usage-based insurance (UBI) market
- The European Union has mandated e-assistance systems in case of an accident. The eCall system, mandatory for all new EU vehicles since March 2018, speeds up emergency-response times by 40% to 50%. In Russia a similar system for new cars was implemented at the end of 2017. Numerous countries such as China, Germany, Singapore, and South Africa, have voluntary systems that provide UBI incentives.
Key Drivers of Electric Vehicle UBI Market
- The integration of telematics has become a mainstream trend in the automotive industry. Vehicle telematics helps improve driving behavior, road safety, and align insurance premiums via usage-based insurance (UBI). According to GSMA, the telematics industry is estimated to reach a value of US$ 750 billion by 2030. Increase in willingness of governments to mandate telematics services such as emergency-call capabilities and an increase in demand for greater connectivity and intelligence in vehicles are major factors boosting the adoption of telematics in vehicles. Therefore, a rise in telematics in electric vehicles to track droving pattern and driving behavior of driver and reduce claims is expected to drive the global electric vehicle UBI market.
- Insurance companies are expanding their product portfolio with the launch of new UBI policies as a solution to a rise in the demand for lower EV insurance premium. For instance, in June 2021, NTUC Income, a Singapore-based insurance company announced that it would expand its coverage on electric vehicles (EVs) and offer usage-based motor insurance (UBI) to EV owners.
Electric Vehicle UBI Market: Restraint
- In automotive usage-based insurance, the regulatory framework favors lower premiums for good driving behavior. Thus, ambiguity over regulations and legislative environments is likely to restrain the usage-based insurance market for automotive. For instance, in the U.S., each state has its laws and regulations for automotive usage-based insurance. Illinois has regulations for pay-as-you-drive (PAYD) plans and does not have clear regulations on pay-how-you-drive (PHYD). Dealing with different sets of regulations complicates the process of automotive usage-based insurance in the U.S. Furthermore, different requirements for automotive insurance in different states create operational roadblocks for cross-state fleets.
Electric Vehicle UBI Market: COVID Impact
- The COVID-19 outbreak disrupted the entire automotive supply chain on a global scale during the second and third quarters of 2020, impacting the new electric vehicle sales in 2020. Manufacturing units around the world were shut down in first half on 2020 and vehicle sales have taken a huge hit. However, the majority of the automakers resumed vehicle production with limited production and necessary measures. Conditions improved in the latter months, but overall EV manufacturers did not suffer much as demand for zero emission vehicles increased during the latter months of 2020. This led to an overall increase in demand for electric vehicles in the market.
- Additionally, according to a survey conducted on insurance premiums in U.S., it was found that vehicle owners did not want to pay full automotive insurance premiums as majority of consumers did not drive vehicles during pandemic scenario. Such consumers are expected to incline towards Usage-based insurance schemes. This, in turn, offers considerable opportunity for the global electric vehicle UBI market.
North America to account for prominent share of global electric vehicle UBI market
- In terms of region, the global electric vehicle UBI market can be segmented into North America, Europe, Latin America, Asia Pacific, and Middle East & Africa
- The market in North America is estimated to expand due to an increase in adoption of Mobility-as-a-Service and surge in collaborations between telematics and insurance companies. Insurance companies offering telematics insurance are constantly leveraging various factors such as driver behavior to enhance solutions and deliver better packages and schemes.
- High disposable income and awareness about UBI policies to reduce insurance premium charges among the population of the region are fueling the electric vehicle UBI market at a rapid pace in North America
- Increase in trends toward electric vehicles in North America in addition to insurance companies tracking vehicle driver behavior for UBI schemes is likely to offer lucrative opportunity for market players in North America
Key Players Operating in Electric Vehicle UBI Market
The global electric vehicle UBI market is concentrated owing to the presence of top manufacturers. A few key players operating in the global electric vehicle UBI market are:
- Allstate Insurance Company
- Amica Mutual Insurance Company
- Assicurazioni Generali S.P.A.
- Cambridge Mobile Telematics
- Insure the Box Limited
- Liberty Mutual Insurance Company
- Metromile Inc.
- Modus Group, LLC
- Nationwide Mutual Insurance Company
- NTUC Income Insurance Co-operative Limited
- Octo Group S.P.A
- Progressive Casualty Insurance Company
- Sierra Wireless
- State Farm Mutual Automobile Insurance Company
- The Floow
- Trak Global Group
- Unipolsai Assicurazioni S.P.A
- Webfleet Solutions
- Zubie, Inc
Global Electric Vehicle UBI Market: Research Scope
Global Electric Vehicle UBI Market, by Vehicle Type
- Passenger Vehicle
- Light Commercial Vehicles
- Heavy Commercial Vehicles
Global Electric Vehicle UBI Market, by Electric Vehicle Type
- Battery Electric Vehicle (BEV)
- Plug-in Hybrid Vehicle (PHEV)
- Fuel-cell Electric Vehicle (FCEV)
Global Electric Vehicle UBI Market, by Package Type
- Pay-As-You-Drive (PAYD)
- Pay-How-You-Drive (PHYD)
- Manage-How-You-Drive (MHYD)
Global Electric Vehicle UBI Market, by Technology
- Black Box
Global Electric Vehicle UBI Market, by Vehicle Age
Global Electric Vehicle UBI Market, by Device Type
- Bring Your Own Device (BYOD)
- Company Offered
Global Electric Vehicle UBI Market, by Region
- North America
- Nordic Countries
- Russia & CIS
- Rest of Europe
- Asia Pacific
- South Korea
- Rest of Asia Pacific
- Latin America
- Rest of Latin America
- Middle East & Africa
- South Africa
- Rest of Middle East & Africa
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