Automotive Usage-Based Insurance - Market Share Analysis, Industry Trends & Statistics, Growth Forecasts (2026-2031)

The automotive usage-Based insurance market size is expected to grow from USD 67.21 billion in 2025 to USD 76.59 billion in 2026 and is forecast to reach USD 162.12 billion by 2031 at 4.61% CAGR over 2026-2031. This report is Segmented by Type (Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), and Manage-How-You-Drive (MHYD)), by Solution (Dongle, Black Box, Embedded, and Smartphones), by Vehicle Type (Passenger Cars and Commercial Vehicles), and by Geography (North America, South America, Europe, Asia-Pacific, and the Middle East and Africa). The Forecasts are Provided in USD.

Global Automotive Usage-Based Insurance Market Trends and Insights

OEM Embedded Telematics Rollouts: Factory-Fit Data Reshaping Underwriting Economics

The automotive usage-based insurance market is moving away from retrofit devices because factory-fitted telematics reduces setup friction and provides insurers with more stable access to vehicle-generated data. In March 2026, Geotab launched a native telematics integration for Hyundai vehicles across Europe, enabling hardware-free fleet data transmission and reducing the need for aftermarket installation. IMS also confirmed that Volkswagen-embedded sensor data can now be translated into underwriting-ready pay-how-you-drive outputs through its integration with high mobility, enabling insurers to plug OEM data into existing scoring workflows without changing the front-end customer experience. IDEMIA Secure Transactions announced in February 2026 that it is managing automotive connectivity for Hyundai Motor Group across strategic global markets, which supports a broader connected-car base from the factory onward. As this installed base grows, the automotive usage-based insurance market will reward carriers that build direct OEM data pipelines, as they will be able to price risk with richer telemetry than insurers still relying solely on app or dongle inputs. This does not remove the role of smartphones, but it does raise the long-term value of embedded data partnerships within the automotive usage-based insurance market.

Fleet Pay-Per-Mile Adoption: Gig Economy and Logistics Fleets Accelerate Commercial UBI

The automotive usage-based insurance market is finding a stronger commercial growth engine as fleet managers seek pricing models that reflect actual usage and driving behavior rather than static annual assumptions. Cambridge Mobile Telematics launched the Drivewell Fleet in January 2025 to help commercial auto insurers reach full telematics coverage by ingesting data from existing connected vehicle systems and avoiding dedicated hardware where possible. That matters because commercial deployment has historically been slowed by hardware logistics, inconsistent data capture, and the need to standardize signals across mixed fleets. The same CMT material cites findings from the IoT Insurance Observatory that fleets enrolled in UBI programs saw a 10% to 19% reduction in claims frequency within 18 months, which materially strengthens the business case for behavior-linked pricing CMT. In the automotive usage-based insurance market, this creates a margin case as much as a growth case, because lower claims frequency can offset the discounts carriers use to attract fleet operators. The result is a clearer path for commercial telematics programs in logistics, last-mile delivery, and gig-linked vehicle pools across the automotive usage-based insurance market.

Consent Fatigue on Telematics: Trust Deficit Constraining Market Depth

The automotive usage-based insurance market still faces a trust problem, even though product awareness is much stronger than it was a few years ago. IMS reported in 2026 that 72% of motorists across five international markets were open to UBI in principle, yet more than half remained reluctant to share driving data due to concerns about misuse and transparency. That gap matters because enrollment is the foundation of every scoring model, and weak opt-in rates reduce the volume and diversity of the data pool that insurers need to refine pricing. The Congressional Research Service also noted that the FTC’s proposed consent order with GM and OnStar in early 2025 would require affirmative express consent before future collection of driving behavior data and would restrict sharing with consumer reporting agencies for 5 years. In the automotive usage-based insurance market, this means consent architecture is becoming part of the product itself rather than a legal afterthought. Programs that give drivers visible control over data use, retention, and rewards will likely scale faster than programs that rely on generic terms and passive opt-in flows across the automotive usage-based insurance market.

Other drivers and restraints analyzed in the detailed report include:

• Usage-Priced EV Insurance Demand: Battery and Behavior Data Unlock New Pricing Dimensions
• Claims Automation Cost Advantage: Telematics-Linked AI Closes the Expense Ratio Gap
• Multi-Jurisdiction Compliance Fragmentation: Regulatory Divergence as a Market-Entry Tax

Segment Analysis

Pay-as-you-drive held a 44.76% share of the automotive usage-based insurance market in 2025, maintaining its lead because behavioral scoring is already familiar to both carriers and policyholders. The automotive usage-based insurance market still leans toward PHYD because it provides insurers with a broader risk picture than mileage-only models by capturing braking, acceleration, cornering, and distraction-related behaviors. Progressive reported that around 21 million policyholders were enrolled in Snapshot in Q1 2026, roughly 53% of its personal auto book, indicating that behavior-based segmentation is now deeply embedded in leading personal lines programs. This scale matters because large enrolled books help carriers refine loss modeling and price more confidently across a wider range of driver profiles. The automotive usage-based insurance market, therefore, continues to treat PHYD as the most established format where underwriting precision and program familiarity matter most.

Manage-how-you-drive is projected to grow at a 22.39% CAGR through 2031, making it the fastest-growing type in the automotive usage-based insurance market. Its appeal lies in turning telematics into an active relationship rather than a passive score, as coaching, reward loops, and crash support can improve both retention and driver behavior over time. Arity and the IoT Insurance Observatory found in 2026 that 82% of surveyed policyholders would recommend a telematics app that provides coaching feedback, crash assistance, and safe-driving rewards, and that figure rose above 90% among drivers under 53. Pay-as-you-drive remains relevant in the automotive usage-based insurance market for low-mileage urban users and hybrid workers whose annual driving volume no longer fits conventional rating assumptions. As a result, the automotive usage-based insurance market is expanding from simple price measurement to a broader model in which pricing, coaching, and service increasingly sit within the same product frame.

Complete Report Scope:

• By Type
  • Pay-As-You-Drive (PAYD)
  • Pay-How-You-Drive (PHYD)
  • Manage-How-You-Drive (MHYD)
• By Solution
  • Dongle
  • Black Box
  • Embedded
  • Smartphones
• By Vehicle Type
  • Passenger Cars
  • Commercial Vehicles
• By Geography
  • North America
    • United States
    • Canada
    • Mexico
  • South America
    • Brazil
    • Peru
    • Chile
    • Argentina
    • Rest of South America
  • Europe
    • United Kingdom
    • Germany
    • France
    • Spain
    • Italy
    • BENELUX (Belgium, Netherlands, and Luxembourg)
    • NORDICS (Denmark, Finland, Iceland, Norway, and Sweden)
    • Rest of Europe
  • Asia-Pacific
    • India
    • China
    • Japan
    • Australia
    • South Korea
    • South East Asia (Singapore, Malaysia, Thailand, Indonesia, Vietnam, and Philippines)
    • Rest of Asia-Pacific
  • Middle East and Africa
    • United Arab Emirates
    • Saudi Arabia
    • South Africa
    • Nigeria
    • Rest of Middle East and Africa

Geography Analysis

North America accounted for 39.84% of the automotive usage-based insurance market share in 2025, making it the largest regional contributor, on the back of mature telematics infrastructure and strong insurer participation. The automotive usage-based insurance market in North America also benefits from the scale of established programs, and Progressive reported around 21 million Snapshot-enrolled policyholders in Q1 2026, equal to roughly 53% of its personal auto book, while the company posted a consolidated combined ratio of 86.4 and net premiums written of USD 23.6 billion in the quarter. This creates a reinforcing loop in which larger data pools improve pricing and stronger pricing performance helps support further enrollment. The automotive usage-based insurance market in the region is also shaped by compliance pressure because vehicle data governance is tightening at both federal and state discussion levels. That means North America combines the deepest commercial base with some of the most visible privacy and consent challenges in the automotive usage-based insurance market.

Europe remained the second-largest region in the automotive usage-based insurance market, supported by a policy environment that has normalized telematics adoption more than in many other mature markets. IVASS reported that 17.8% of RC auto policies in Italy carried a telematic black box in 2024, which made Italy one of the clearest proof points for scaled telematics adoption in Europe. IVASS Regulation 56/2025, which mandates digital claims reporting via SPID or CIE from April 2026, strengthens the region’s move toward more digitized insurance workflows. Germany remains a slower adopter, and TH Köln found in February 2025 that telematics tariffs were still niche there and would likely scale only if the market moved toward stronger bonus-malus pricing structures. The EU eCall requirement continues to support the automotive usage-based insurance market because every new vehicle sold in the region carries an embedded emergency response system that improves telematics readiness.

Asia-Pacific is projected to grow at 21.13% CAGR through 2031, which makes it the fastest-growing region in the automotive usage-based insurance market. India is an important driver because GPS-linked vehicle tracking requirements in commercial mobility and IRDAI’s allowance for usage-based motor insurance add-ons are helping create a clearer product pathway for pay-linked covers. The automotive usage-based insurance market in Asia-Pacific is also benefiting from smartphone-led distribution and expanding EV data ecosystems, which make it easier for insurers to scale with lighter hardware models first and richer integrations later. South America and the Middle East and Africa remain earlier-stage opportunities, but the automotive usage-based insurance market is opening there as connected-vehicle sales, smart mobility programs, and fleet digitization gradually broaden the base for telematics-linked products.

List of Companies Covered in this Report:

• Progressive Corporation
• Allstate Corporation
• State Farm Mutual Automobile Insurance Company
• Liberty Mutual Insurance
• AXA
• Allianz SE
• Zurich Insurance Group AG
• Assicurazioni Generali S.p.A.
• MAPFRE, S.A.
• Aioi Nissay Dowa Insurance Co., Ltd.
• Octo Group S.p.A.
• Cambridge Mobile Telematics, Inc.
• The Floow Limited
• Verisk Analytics, Inc.
• Arity, LLC
• TomTom International B.V.
• Vodafone Automotive S.p.A.
• Insure The Box Limited
• Root, Inc.
• By Miles Limited

Additional Benefits:

• The market estimate (ME) sheet in Excel format
• 3 months of analyst support