Market Insights
"The Usage-Based Insurance (UBI) market size was valued at US$ 43.38 billion in 2023 and is projected to grow at a robust CAGR of 7.2% during the forecast period to reach US$ 70.46 billion by 2030."
Market Dynamics
Introduction
Usage-Based Insurance (UBI) is an innovative auto insurance model that calculates premiums based on the actual usage of the vehicle, including factors such as distance driven, braking habits, driving behaviour, and time of day. This model is gaining traction due to its ability to offer personalized insurance premiums, which can lead to cost savings for safe drivers and encourage safer driving habits. The market is witnessing significant growth due to the increasing adoption of telematics technology, the rise in electric vehicle sales in 2023 by 35%, and the growing demand for personalized insurance solutions.
Recent Product Development
- Definity's UBI Product Launch: In March 2024, Definity introduced a UBI product emphasizing personalized driving experiences through telematics data, granting drivers greater control over premiums and promoting safer driving habits.
- Citroën and ICICI Lombard Collaboration: In August 2023, Citroën partnered with ICICI Lombard General Insurance to launch a UBI program for the eC3 electric vehicle in India. This initiative offers lower renewal premiums for safe driving, incentivizing responsible behaviour among drivers. ?
Segment Analysis
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Segmentations
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List of Sub-Segments
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Segments with High-Growth Opportunity
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Vehicle Type Analysis
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ICE Vehicles, Electric Vehicles
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Electric Vehicles are expected to witness the fastest growth due to the increasing adoption of EVs.
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Technology Analysis
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OBD-II, Smartphone, Embedded Telematics, Others
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Embedded Telematics is anticipated to dominate the market due to its accuracy and reliability.
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Policy Type Analysis
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Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), Manage-How-You-Drive (MHYD)
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Pay-How-You-Drive (PHYD) is expected to grow at the highest CAGR due to its focus on driving behaviour.
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Region Analysis
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North America, Europe, Asia-Pacific, Rest of the World
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North America is expected to dominate the market, while Asia-Pacific
is likely to grow the fastes
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By Vehicle Type
"Electric Vehicles are expected to witness the fastest growth in the UBI market during the forecast period."
The UBI market is segmented into ICE Vehicles and Electric Vehicles. Electric Vehicles (EVs) are expected to witness the fastest growth due to the increasing adoption of EVs globally, driven by government incentives, environmental concerns, and advancements in battery technology. In 2023 itself, 14 million units of EVs were sold. The integration of telematics in EVs is further propelling the demand for UBI in this segment.
By Technology
"Embedded Telematics is expected to dominate the UBI market during the forecast period."
The market is segmented by technology into OBD-II, Smartphone, Embedded Telematics, and Others. Embedded Telematics is expected to dominate the market due to its ability to provide accurate and real-time data, which is crucial for UBI. The growing adoption of connected car technologies is also driving the demand for embedded telematics solutions.
By Policy Type
"Pay-How-You-Drive (PHYD) is expected to grow at the highest CAGR during the forecast period."
The UBI market is segmented by policy type into Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), and Manage-How-You-Drive (MHYD). PHYD is expected to grow at the highest CAGR due to its focus on driving behaviour, which allows insurers to offer more personalized premiums based on how safely a person drives.
Regional Analysis
"North America is expected to dominate the UBI market, while Asia-Pacific is likely to grow the fastest."
In terms of regions, North America is expected to dominate the UBI market due to the high adoption of telematics and the presence of major UBI providers. However, Asia-Pacific is projected to grow at the fastest rate, driven by the increasing penetration of smartphones, the rise in electric vehicle sales, and the growing awareness of UBI benefits in emerging economies like China and India.
Key Players
The UBI market is highly competitive, with several key players dominating the market. These players are focusing on strategic partnerships, acquisitions, and product innovations to strengthen their market position. Some of the leading players in the market include:
- Progressive Corporation (US)
- State Farm Mutual Automobile Insurance Company (US)
- Liberty Mutual Insurance (US)
- AXA (France)
- Allianz (Germany)
- MAPFRE (Spain)
- Octo Group S.p.A. (Italy)
- Cambridge Telematics (US)
- Tesla (US)
- Farmers Insurance Group
Note: The above list does not necessarily include all the top players in the market.
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Report Features
- This report provides market intelligence most comprehensively. The report structure has been kept so that it offers maximum business value. It provides critical insights into market dynamics and will enable strategic decision-making for existing market players as well as those willing to enter the market. The following are the key features of the report:
- Market structure: Overview, industry life cycle analysis, supply chain analysis.
- Market environment analysis: Growth drivers and constraints, Porter's five forces analysis, SWOT analysis.
- Market trend and forecast analysis.
- Market segment trend and forecast.
- Competitive landscape and dynamics: Market share, Service portfolio, New Product Launches, etc.
- Attractive market segments and associated growth opportunities.
- Emerging trends.
- Strategic growth opportunities for the existing and new players.
- Key success factors.
The global Usage-based Insurance (UBI) market is segmented into the following categories.
Usage-Based Insurance (UBI) Market, by Vehicle Type
- Internal Combustion Engine Vehicle (Regional Analysis: North America, Europe, Asia-Pacific, and RoW)
- Electric Vehicle (Regional Analysis: North America, Europe, Asia-Pacific, and RoW)
User-Based Insurance (UBI) Market by Technology
- On Board Diagnostic Version-II (Regional Analysis: North America, Europe, Asia-Pacific, and RoW)
- Smartphone (Regional Analysis: North America, Europe, Asia-Pacific, and RoW)
- Embedded Telematics (Regional Analysis: North America, Europe, Asia-Pacific, and RoW)
- Others (Regional Analysis: North America, Europe, Asia-Pacific, and RoW)
User-Based Insurance (UBI) Market by Policy Type
- Pay As You Drive (PAYD) (Regional Analysis: North America, Europe, Asia-Pacific, and RoW)
- Pay-How-You-Drive (PHYD) (Regional Analysis: North America, Europe, Asia-Pacific, and RoW)
- Manage-How-You-Drive (MHYD) (Regional Analysis: North America, Europe, Asia-Pacific, and RoW)
User-Based Insurance (UBI) Market by Region
- North America (Country Analysis: The USA, Canada, and Mexico)
- Europe (Country Analysis: Germany, France, The UK, Russia, and the Rest of Europe)
- Asia-Pacific (Country Analysis: Japan, China, India, and Rest of Asia-Pacific)
- Rest of the World (Country Analysis: Brazil, Saudi Arabia, and Others)
Research Methodology
- This strategic assessment report from Stratview Research provides a comprehensive analysis that reflects today's global User-Based Insurance (UBI) market for IC & EV realities and future market possibilities for the forecast period.
- The report segments and analyses the market in the most detailed manner in order to provide a panoramic view of the market.
- The vital data/information provided in the report can play a crucial role for market participants and investors in identifying the low-hanging fruit available in the market and formulating growth strategies to expedite their growth process.
- This report offers high-quality insights and is the outcome of a detailed research methodology comprising extensive secondary research, rigorous primary interviews with industry stakeholders, and validation and triangulation with ABC Research's internal database and statistical tools.
- More than 1,000 authenticated secondary sources, such as company annual reports, fact books, press releases, journals, investor presentations, white papers, patents, and articles, have been leveraged to gather the data.
- We conducted more than 15 detailed primary interviews with market players across the value chain in all four regions and industry experts to obtain both qualitative and quantitative insights.
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Company Profiling
- Detailed profiling of additional market players (up to three players)
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Competitive Benchmarking
- Benchmarking of key players on the following parameters: Service portfolio, geographical reach, regional presence, and strategic alliances
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