Usage-based Insurance Market Development Status & Growth Opportunities by 2027

Usage-based Insurance Market Development Status & Growth Opportunities by 2027

Global usage-based insurance market is expected to hit a remuneration of 125 billion By 2027.Increasing collaborations between solution providers and insurance companies would likely be a key factor pushing market growth. From these partnerships, insurance firms are focusing on using embedded telematics solution to grow their profitability.

Global usage-based insurance market is projected to witness heavy gains in the forecast timespan owing to the steady uptake of UBI platforms across the insurance sector. Through these platforms, insurance companies aim to align insurance premiums and accurately track driving patterns with estimated risks.                                                             

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In addition, insurance companies are also collaborating with software firms to provide smartphone-based telematics insurance programs to customers and set themselves apart from the competition. Citing an instance, in August 2018, NJM Insurance Group collaborated with IMS for a new smartphone-based telematics program. NJM leverages the smartphone telematics of IMS to promote customer safety by offering rewards to safe drivers through a driver scoring system.  

Numerous benefits offered by telematics solutions to customers, when installed on smartphones, are some of the major reasons driving the smartphone segment. In fact, the smartphone segment is expected to dominate the market in the coming years.

APAC usage-based insurance market is anticipated to observe heavy gains and grow at a CAGR of 26% through 2026. Increasing the usage of telematic technologies by insurance providers in the region would outline the overall market outlook.

Japan and China are at the forefront when it comes to using telematics technologies. In addition, the commercialization of UBI technologies across developing countries like Thailand, Vietnam, and India would further aid the market expansion.

Apart from surging telematic solutions, automotive manufacturers in APAC are partnering with insurance providers for developing insurance products that are consumer centric. Citing an instance, in 2017, Toyota and MS & AD Insurance Group’s Aioi Nissay Dowa Insurance together launched the first driving behavior-based telematics automobile insurance of Japan.   

With respect to safety concerns and cost efficiency, the PHYD (Pay-How-You-Drive) insurance package is projected to witness lucrative growth through 2027. The segment held a market share of more than 70% in 2018 and is projected to dominate the usage-based insurance market in the coming years.

The growing popularity of PHYD in consumers for reducing insurance premiums would propel the segment growth. Earlier, insurance models were based on the driving history of the driver. However, PHYD insurance focuses on current driving behavior to reduce insurance premiums. In fact, customers are utilizing the PHYD policy to decrease careless driving and implementing safe driving methods to earn incentives and rewards. 

Elaborating further on PHYD segment, the policy is also beneficial for insurance providers. This policy helps in reducing unanticipated accident risks, fraudulent cases, and lower insurance claims. Furthermore, merging of services like theft insurance programs and vehicle wellness reports with PHYD packages would further drive the usage-based insurance market growth.

All in all, the above-mentioned determinants would offer a wide range of opportunities for usage-based insurance market players in coming years. The competitive landscape of global user-based insurance market includes players like Generali, Octo, Progressive, UnipolSai, Desjardins Group, Nationwide, AXA, Sierra Wireless, Allstate, State Farm, Liberty Mutual, and Allianz among others.

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Partial Chapter of the Table of Content

Chapter 5   Usage-based Insurance Market, By Package

5.1    Key trends, by package

5.2    PHYD

5.2.1    PHYD market estimates and forecast, 2016- 2027

5.3    PAYD

5.3.1    PAYD market estimates and forecast, 2016- 2027

5.3.2    Device-based    Device-based market estimates and forecast, 2016- 2027

5.3.3    Telematics-based    Telematics-based market estimates and forecast, 2016- 2027

Chapter 6   Usage-based Insurance Market, By Technology

6.1    Key trends, by technology

6.2    OBD-II

6.2.1    OBD-II market estimates and forecast, 2016- 2027

6.3    Smartphone

6.3.1    Smartphone market estimates and forecast, 2016- 2027

6.4    Black Box

6.4.1    Black Box market estimates and forecast, 2016- 2027

6.5    Embedded telematics

6.5.1    Embedded telematics market estimates and forecast, 2016- 2027

Chapter 7   Usage-based Insurance Market, By Vehicle Type

7.1    Key trends, by vehicle type

7.2    Passenger vehicle

7.2.1    Market estimates and forecast, 2016- 2027

7.2.2    Market estimates & forecast, by technology, 2016- 2027

7.3    Commercial vehicle

7.3.1    Market estimates and forecast, 2016- 2027

7.3.2    Market estimates & forecast, by technology, 2016- 2027

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