Global Usage-based Insurance Market (2023-2028) Competitive Analysis, Impact of Covid-19, Ansoff Analysis

A futuristic UBI program will collect data from multiple sources, bring in data from smartphone, connected car, and other first-party data

The Global Usage-based Insurance Market is estimated to be USD 70.61 Bn in 2023 and is expected to reach USD 210.36 Bn by 2028 growing at a CAGR of 24.4%.

Usage-based insurance (UBI) is a type of auto insurance where the premiums are determined based on the driver's behavior, including driving habits, mileage, and other factors. UBI policies use telematics devices, such as GPS or accelerometer sensors, to track and collect data on the driver's behavior while driving. This data determines the driver's risk profile and calculates their insurance premiums accordingly. UBI policies aim to provide a more personalized and fairer pricing system for auto insurance by rewarding good drivers and encouraging safe driving behaviors. Drivers who have lower mileage, avoid sudden braking or acceleration, and drive during safer times of day may receive lower premiums.

Telematics and connected cars are rapidly gaining adoption in the automotive industry. One of the main drivers of the increasing adoption of telematics and connected cars is the demand for more advanced safety features. Telematics technology can provide real-time data on a vehicle's location, speed, and other factors that can help prevent accidents or reduce their severity. Connected cars can also communicate with other vehicles and infrastructure to provide advanced warnings of potential hazards.

High telematics installation cost is the major factor restraining the growth of the usage-based insurance market. Insurance service is mainly dependent on telematics, and installation of telematics is a high-technology process whose cost is estimated to surge in coming years. Due to this, the operating expenses of usage-based insurance service providers are also expected to increase, hindering the market evolution. However, smartphone-based telematics service is projected to attain popularity, owing to relatively lower cost. In recent years, the vehicle insurance sector has seen an increase in the adoption of cutting-edge technology. Usage-Based Insurance (UBI) for smartphones and hybrid-based UBI are two examples of such technology. Smartphone-based UBI involves using a mobile app that tracks a driver's behavior, such as speed, acceleration, and braking, to determine their risk profile. On the other hand, hybrid-based UBI involves using telematics devices installed in a vehicle to track its movements and driver behavior. These devices are often connected to the vehicle's onboard diagnostic system and can provide more detailed data on drivers' habits. Hybrid-based UBI is becoming more popular among commercial and fleet operators as it allows for more accurate and customized risk assessments. As more people become aware of the benefits of UBI, more drivers will likely adopt these technologies to save on their auto insurance premiums while improving their driving habits.

Usage-based insurance companies frequently face data privacy issues. UBI gathers and analyzes personal data, including driving behavior, location data, and other details, to ascertain a driver's risk profile and calculate insurance rates. This information may be extremely sensitive; thus, it must be protected to prevent misuse or access by unauthorized persons. The possibility of data leaks is one of UBI's top data privacy concerns. Large-scale personal data gathering and storage raise the possibility of cyberattacks, which can expose confidential data. Insurance companies must ensure their data security procedures are current and in line with industry best practices to reduce risk.

Market Segmentations

• The Global Usage-based Insurance Market is segmented based on Type, Technology, Vehicle Age, Vehicle Type, and Geography.
• By Type, the market is classified into Pay-as-you-drive (PAYD), Pay-how-you-drive (PHYD), and Manage-how-you-drive (MHYD). Manage-how-you-drive is an extended version of Pay-as-you-drive. It provides feedback to drivers aged between 18 and 25 as new drivers. The MHYD systems work like PHYD by collecting various driving behavior information such as harsh braking, sharp cornering, and over speeding to this rate the driver. It suggests improving in such areas as braking and speed. While the adoption rate of this usage-based insurance model is expected to be less in developing markets, it is suitable for mature markets. With the increase in the adoption of PHYD UBI programs, the popularity of MHYD is set to grow in the future.
• By technology, the market is classified into OBD-II-based UBI Programs, Smartphone-based UBI Programs, Hybrid-based UBI Programs, and Black-box-based UBI Programs. The Blackbox segment is expected to grow significantly over the forecast period. A black box is an electronic device that records information, can be viewed in terms of inputs and outputs, and whose internal workings are unknown to the consumer. The black box system is a data flow diagram in the box's center. The growing use of telematics in UBI for heavy vehicles is increasing the adoption of black boxes across the globe. In addition, the high precision and accuracy of data by Black Box and the use of collected data for accident and claim settlement investigation are other factors significantly contributing to the segment's revenue growth over the forecast period.
• By Vehicle Age, the market is classified into New Vehicles and Used Vehicles. The new vehicles segment is generally the largest segment by vehicle age for usage-based insurance. Insurance companies typically offer more UBI options and discounts for new vehicles than used ones. This trend is expected to continue as more advanced vehicles and connected technologies enter the market.
• By Vehicle Type, the market is classified into Light-Duty Vehicle (LDV) and Heavy-Duty Vehicle (HDV). The heavy-duty vehicle segment is considered to have significant potential for usage-based insurance. Usage-based insurance helps to fleet owners and operators monitor and optimize their vehicles' performance, reduce fuel consumption and maintenance costs, and improve safety and compliance.
• By Geography, the market is classified into the Americas, Europe, Middle-East & Africa, and Asia-Pacific. Americas is expected to account for the largest revenue share due to the increasing number of accidents, claim disputes, and fraud cases, leading to the growing need for user-based insurance in the region. In addition, rising partnerships and collaborations between insurance companies and telematics companies are increasing research opportunities, leading to the development of newer technologies and systems for collecting driver data.

Recent Development

• High Definition Vehicle Insurance launched the Second Generation of its Proprietary Telematics-Based Shift™ Product. - February 2023
• Progressive Corp. has acquired all the outstanding Class A and Class B common shares of Protective Insurance Corp. - February 2021

Company Profiles

The report provides a detailed analysis of the competitors in the market. It covers the financial performance analysis for the publicly listed companies in the market. The report also offers detailed information on the companies' recent development and competitive scenario. Some of the companies covered in this report are Liberty Mutual Group, Mapfre SA, Metromile, Inc., Nationwide Mutual Insurance Co., Progressive Corp., etc.

Countries Studied

• America (Argentina, Brazil, Canada, Chile, Colombia, Mexico, Peru, United States, Rest of Americas)
• Europe (Austria, Belgium, Denmark, Finland, France, Germany, Italy, Ireland, Luxemburg, Netherlands, Norway, Poland, Russia, Spain, Sweden, Switzerland, United Kingdom, Rest of Europe)
• Middle-East and Africa (Egypt, Israel, Nigeria, Qatar, Saudi Arabia, South Africa, United Arab Emirates, Rest of MEA)
• Asia-Pacific (Australia, Bangladesh, China, India, Indonesia, Japan, Malaysia, Philippines, Singapore, South Korea, Sri Lanka, Thailand, Taiwan, Rest of Asia-Pacific)

Competitive Quadrant

The report includes Competitive Quadrant, a proprietary tool to analyze and evaluate the position of companies based on their Industry Position score and Market Performance score. The tool uses various factors for categorizing the players into four categories. Some of these factors considered for analysis are financial performance over the last 3 years, growth strategies, innovation score, new product launches, investments, growth in market share, etc.

Ansoff Analysis

• The report presents a detailed Ansoff matrix analysis for the Global Usage-based Insurance Market. Ansoff Matrix, also known as Product/Market Expansion Grid, is a strategic tool used to design strategies for the growth of the company. The matrix can be used to evaluate approaches in four strategies viz. Market Development, Market Penetration, Product Development and Diversification. The matrix is also used for risk analysis to understand the risk involved with each approach.
• The publisher analyses the Global Usage-based Insurance Market using the Ansoff Matrix to provide the best approaches a company can take to improve its market position.
• Based on the SWOT analysis conducted on the industry and industry players, the publisher has devised suitable strategies for market growth.

Why buy this report?

• The report offers a comprehensive evaluation of the Global Usage-based Insurance Market. The report includes in-depth qualitative analysis, verifiable data from authentic sources, and projections about market size. The projections are calculated using proven research methodologies.
• The research report also provides a detailed market size analysis and projections in volume and value terms. The projections are calculated using verified research methodologies.
• Excel data sheet for the market size will also be provided with the report.
• The report has been compiled through extensive primary and secondary research. The primary research is done through interviews, surveys, and observation of renowned personnel in the industry.
• The report includes an in-depth market analysis using Porter’s 5 forces model, PESTLE Analysis, and the Ansoff Matrix. In addition, the impact of COVID-19 on the market is also featured in the report.
• The report includes the regulatory scenario in the industry, which will help you make a well-informed decision. The report discusses major regulatory bodies and major rules and regulations imposed on this sector across various geographies.
• The report includes Self-Assessment Form, which helps customers evaluate their position in the market compared to their competitors
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Report Highlights:

• A complete analysis of the market, including the parent industry
• Important market dynamics and trends
• Impact Analysis - a comprehensive assessment to confront risk and make strategic & operational decisions to counter the changes in the market environment.
• Market segmentation
• Competitive Analysis: Comparative analysis of competitor
• Historical, current, and projected size of the market based on value and volume
• Market size of the US states
• Market shares and strategies of key players
• Recommendations to companies for strengthening their foothold in the market