Usage-Based Insurance Global Market Opportunities And Strategies To 2031

The global usage-based insurance market reached a value of nearly $28,845.1 million in 2021, having grown at a compound annual growth rate (CAGR) of 13.6% since 2016. The market is expected to grow from $28,845.1 million in 2021 to $110,130.1 million in 2026 at a rate of 30.7%. The market is then expected to grow at a CAGR of 20.7% from 2026 and reach $281,966.0 million in 2031.

Growth in the historic period resulted from growth in vehicle ownership, increasing occurrences of vehicle theft, robust demand for passenger car sales, and high adoption of connected cars. The market was restrained by low insurance penetration in developing countries and a lack of awareness.

Going forward, growing automotive industry, growing demand for electric vehicles, increasing concerns about vehicle safety, and a rapid use of usage-based insurance by insurance companies to improve profitability. Factor that could hinder the growth of the usage-based insurance market in the future include additional charges by insurance brokers.

The usage-based insurance market is segmented by vehicle type into light-duty vehicle (LDV), heavy-duty vehicle (HDV). The light-duty vehicle (LDV) market was the largest segment of the usage-based insurance market segmented by vehicle type, accounting for 58.8% of the total in 2021. Going forward, the heavy-duty vehicle (HDV) segment is expected to be the fastest growing segment in the usage-based insurance market segmented by vehicle type, at a CAGR of 32.9% during 2021-2026.

The usage-based insurance market is also segmented by technology into on-board diagnostic (OBD)-II-based UBI programs, smartphone-based UBI programs, black-box-based UBI programs, and other technologies. The black-box-based UBI programs market was the largest segment of the usage-based insurance market segmented by technology, accounting for 55.7% of the total in 2021. Going forward, the black-box-based UBI programs segment is expected to be the fastest growing segment in the usage-based insurance market segmented by technology, at a CAGR of 31.8% during 2021-2026.

The usage-based insurance market is also segmented by package type into pay-as-you-drive (PAYD), pay-how-you-drive (PHYD), and manage-how-you-drive (MHYD). The pay-as-you-drive (PAYD) market was the largest segment of the usage-based insurance market segmented by package type, accounting for 58.1% of the total in 2021. Going forward, the pay-how-you-drive (PHYD) segment is expected to be the fastest growing segment in the usage-based insurance market segmented by package type, at a CAGR of 31.1% during 2021-2026.

North America was the largest region in the usage-based insurance market, accounting for 35.4% of the total in 2021. It was followed by Asia Pacific, and then the other regions. Going forward, the fastest-growing regions in the usage-based insurance market will be Asia Pacific, and, North America where growth will be at CAGRs of 38.3% and 30.5% respectively. These will be followed by Western Europe, and, South America where the markets are expected to grow at CAGRs of 26.5% and 22.4% respectively.

The global usage-based insurance market is consolidated with small number of large players dominating the market. The top ten competitors in the market made up to 56.08% of the total market in 2021. Progressive Corporation was the largest competitor with 17.12% share of the market, followed by Allstate Corporation with 12.89%, UNIPOLSAI ASSICURAZIONI S.P.A with 6.37%, Allianz SE with 5.10%, Liberty Mutual Insurance with 4.01%, AXA with 3.46%, Mapfre S.A. with 2.51%, State Farm Mutual Automobile Insurance Company with 2.34%, American International Group, Inc with 1.80%, and Nationwide Mutual Insurance Company with 0.46%.

The top opportunities in the usage-based insurance market segmented by vehicle type will arise in the light-duty vehicle (LDV) market segment, which will gain $44,028.1 million of global annual sales by 2026. The top opportunities in the usage-based insurance market segmented by technology will arise in the black-box-based UBI programs market segment, which will gain $47,772.4 of global annual sales by 2026. The top opportunities in the usage-based insurance market segmented by package type will arise in the pay-as-you-drive (PAYD) market segment, which will gain $44,160.3 of global annual sales by 2026. The usage-based insurance market size will gain the most in the USA at $25,260.7 million.

Market-trend-based strategies for the usage-based insurance market include focusing on connected technologies, focusing on smartphone technology-based telematics platform, focusing on telematics technology, focusing on partnerships and collaborations and focusing on self-installed telematics devices.

Player-adopted strategies in the usage-based insurance market include focus on launching innovative programs for helping small business owners, focus on expanding business operations through collaborations and partnerships and focus on increasing the customer base through the launch of innovative programs.

To take advantage of the opportunities, the publisher recommends the usage-based insurance companies to invest in connected technologies, increase focus on telematics technology, expand in emerging markets, focus on strategic partnerships and collaborations, offer competitive pricing, continue to participate in events and conferences, leverage social media and focus on fast-growing segments.

This report describes and explains the usage-based insurance market and covers 2016-2021, termed the historic period, and 2021-2026 termed the forecast period, along with further forecasts for the period 2026-2031. The report evaluates the market across each region and for the major economies within each region.