Usage based insurance market to be worth $66.8 billion by 2026
According to the new market research report “Usage-Based Insurance Market for ICE & Electric Vehicle by Package (PAYD, PHYD, MHYD), Technology (OBD-II, Black box, Smartphone, Embedded), Vehicle Age (New, Old), Device Offering (BYOD, Company Provided) and Region – Global Forecast to 2026″, published by MarketsandMarkets™, the Usage-Based Insurance Market is projected to reach USD 66.8 billion by 2026 from an estimated USD 19.6 billion in 2021, at a CAGR of 27.7% during the forecast period. The growth of the Usage-Based Insurance Market is influenced by factors such as the increasing sales of telematics-equipped vehicles and government regulations on safety and telematics services. In addition, the anticipated increase in demand for connected cars and lower insurance premiums compared to regular insurance are expected to boost the market growth. Therefore, the Usage-Based Insurance Market is expected to witness significant growth in the future.
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141 – Tables
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Light-Duty Vehicle (LDV) is expected to lead the market during the forecast period
Light-duty vehicles constitute passenger cars and light commercial vehicles. The adoption rate of UBI is higher in LDVs than HDVs. Light-duty vehicles can be easily fitted with OBD-II, black box, or other devices to access usage-based insurance plans. Additionally, as LDVs are generally driven by a single person, UBI plans based on driver behavior are ideal for this vehicle segment. Also, leading companies are developing various products and solutions for LDVs such as ride-sharing and autonomous vehicles. Thus, in the coming years, LDVs are expected to witness strong UBI penetration.
Smartphone segment is expected to be the fastest-growing market
According to MarketsandMarkets™ analysis, a smartphone is a fastest-growing segment, by technology, of the Usage-Based Insurance Market owing to the increasing popularity of mobile telematics. In the current market scenario, black box is widely used as it offers reliable data collection and has gained high customer acceptance. The major market is expected to be concentrated in North America and Europe owing to the presence of key players, affinity towards advanced automotive technologies, and relatively higher awareness of UBI than Asia Pacific.
North America is expected to lead the market during the forecast period
North America is estimated to be the largest market for usage-based insurance owing to the high adoption rate of usage-based insurance in new and on-road vehicles equipped with telematics units. Most of the cars sold in the US and Canada belong to the premium segment. The dominance of premium cars increases the adoption rate of usage-based insurance as their regular insurance is very high. With the help of usage-based insurance, vehicle owners can save up to 30% on insurance. In addition, the increasing number of companies offering hardware to avail usage-based insurance has also contributed to the growth of the market.
Key Market Players:
The Usage-Based Insurance Market is dominated by globally established players such as UnipolSai Assicurazioni S.p.A (Italy), Progressive Casualty Insurance Company (US), Allstate Insurance Company (US), State Farm Automobile Mutual Insurance Company (US), and Liberty Mutual Insurance Company (US).