Usage Based Insurance Market: Overview

A type of motor insurance that is designed to determine the premium of the vehicle by monitoring the driving behavior of the people is known as usage based insurance. In order to track the vehicle’s behavior, a wireless device is fitted in the vehicle that transmits the data to the insurance company whenever the premium is to be charged. Owing to rising vehicles and accidents that do a major damage to the vehicle usage based insurance, a dedicated market for the same exists from a global perspective. This market is experiencing a major boost recently owing to the factors such as real-time monitoring, and growing interest of people in connected vehicles. As a result of these and many other benefits, the global usage based insurance market is expected to witness a staggering growth of 30% CAGR and is projected to surpass US$200 bn by the end of forecast period.

However, the process of usage based insurance model is quite complex. It requires various industries such as insurance, IT and telecom, and hardware to function coherently. Due to this the global usage based insurance model faces several challenges such as legal hurdles and extensive development of IT infrastructure. Moreover, majority of the clients are ready to share their vehicle data with the insurance companies.

usage based insurance market

Pay-How-You-Drive (PHYD) to be the Dominant Segment

The segmentation of the global usage based insurance market is done on the basis of policy type, types of vehicles, and region. Depending upon the type of the policy, the market is further segmented into pay-how-you-drive (PHYD), pay-as-you-drive (PAYD), and manage-how-you-drive (MHYD). Out of these segments, pay-as-you-drive is expected to exhibit maximum potential in the global usage based insurance market.

The PAYD model is basically the policy where the value of premium is decided on the basis of the miles driven by the customer’s car. It is generally monitored by odometers installed in the car connected to wireless devices.  Moreover, the PHYD or pay-how-you-drive segment is also expected to witness a robust growth in global usage based insurance market during the forecast period. Here the premium is evaluated on the basis or data collected by tracking the driving behavior of people. This includes parameters such as, acceleration, braking, and location, and time taken to drive.

On the basis of type of devices, the global usage based insurance market is categorized into OBD dongle, smartphones, and black box. The black box segment is likely to dominate the market in the forecast period. The segment is expected to be followed by OBD dongle segment. The growth of these segments is attributed to the properties such as accuracy and long term connectivity of the devices.

In terms of vehicle type, the global usage based insurance market is segmented into two categories, passenger vehicles and commercial vehicles. In this criteria, the passenger vehicle segment is expected to grow substantially in the forecast period as a result of increasing demand of lower operating cost of the vehicles.

North America is expected to Show Maximum Potential

The market has its presence in regions such as Europe, North America, Asia Pacific, Latin America, and Middle East and Africa. North America is expected to show maximum potential in terms of revenue in the global usage based insurance market in the forecast period. The growth of the market is attributed to rising consumer confidence in adopting usage based insurance. The European region is expected to follow North America in terms of growth based on rising innovations in automotive industries in the forecast period.

Some of the major players of global usage based insurance market are Insure the Box, State Farm, AllState Insurance Company, Uniqa, Generalli, Groupama, Uniposai, and Liberty Mutual.

Usage-based Insurance Market - Overview

This report analyzes and forecasts the market for usage-based insurance at the global and regional level. The market has been forecasted based on volume (thousand units) and value (US$ Mn) from 2019 to 2027. The study includes drivers and restraints of the global usage-based insurance market. It also covers the impact of these drivers and restraints on the demand for Usage-based Insurance services during the forecast period. The report also highlights opportunities and future scope in the market at the global and regional level.

The report comprises a detailed value chain analysis, which provides a comprehensive view of the global usage-based insurance market. The Porter’s Five Forces model for the market has also been included to help understand the competitive landscape in the market. The study encompasses market attractiveness analysis, wherein the service is benchmarked based on market size, growth rate, and general market share.

The study provides a decisive view of the global usage-based insurance market by segmenting it in terms of policy type, device type, vehicle type, and region. These segments have been analyzed based on present and future trends. Regional segmentation includes the current and forecast demand for Usage-based Insurance in North America, Europe, Asia Pacific, Latin America, and Middle East & Africa. The report also covers the demand for individual segments in all major countries across all the regions.

The study includes profiles of major companies operating in the global usage-based insurance market. Market players have been profiled in terms of attributes such as company overview, financial overview, business strategies, and recent developments.

Rising competition among insurance companies to quote a competitive price and to effectively underwrite the insurance is driving the usage-based insurance market. Real-time tracking of the vehicle helps asses the risk more accurately and hence, insurance companies can determine indemnity and maintain actuarial reserve. Rising consumer interest in connected vehicles has fueled the adoption of usage-based insurance services.

The report provides the estimated cumulative market size of usage-based insurance for 2018 and forecast for the next nine years. The global market size has been provided in terms of volume and value. Market numbers have been estimated based on policy type, device type, vehicle type, and regional segments. Market size and forecast for each policy type, device type, and vehicle have been provided in terms of global and regional/country markets.

In order to compile the research report, we conducted in-depth interviews and discussions with a number of key industry participants and opinion leaders. Primary research represents the bulk of research efforts, supplemented by extensive secondary research. We reviewed key player’s product literature, annual reports, press releases, and relevant documents for competitive analysis and market understanding. Secondary research also includes a search of recent trade, technical writing, internet sources, and statistics data from government websites, trade associations, and agencies. This has proven to be the most reliable, effective, and successful approach for obtaining precise market data, capturing industry participants’ insights, and recognizing business opportunities.

Secondary research sources that are typically referred to include, but are not limited to company websites, annual reports, financial reports, broker reports, investor presentations, and SEC filings, internal and external proprietary databases, and relevant patent and regulatory databases, national government documents, statistical databases, and market reports, news articles, press releases, and webcasts specific to companies operating in the market, National government documents, statistical databases, and market reports, OICA, JAMA, Factiva, etc.

Primary research involves e-mail interactions, telephonic interviews, LinkedIn interviews, and face-to-face interviews for each market, category, segment, and sub-segment across geographies. We conduct primary interviews on an ongoing basis with industry participants and commentators in order to validate the data and analysis. Primary interviews provide firsthand information on market size, market trends, growth trends, competitive landscape, and outlook, etc. These help validate and strengthen secondary research findings. These also help develop the analysis team’s expertise and market understanding. 

The global usage-based insurance market has been segmented as follows:

Policy

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

Device

  • Black Box
  • OBD Dongle
  • Smartphone
  • Others 

Vehicle

  • Passenger Vehicle
  • Commercial Vehicle 

Region

  • North America
    • U.S.
    • Canada
  • Europe
    • Germany
    • U.K.
    • France
    • Italy
    • Spain
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • ANZ
    • Rest of Asia Pacific
  • Middle East & Africa (MEA)
    • GCC
    • South Africa
    • Rest of MEA
  • Latin America
    • Brazil
    • Mexico
    • Rest of Latin America

Custom Market Research Services

TMR offers custom market research services that help clients to get information on their business scenario required where syndicated solutions are not enough.

REQUEST CUSTOMIZATION

Usage Based Insurance Market

Buy Now