Allied Market Research

2024

Usage-based Insurance For Automotive Market

Usage-based Insurance for Automotive Market Size, Share, Competitive Landscape and Trend Analysis Report, by Policy Type (Pay-How-You-Drive Insurance, Pay-As-You-Drive Insurance, Manage-How-You-Drive Insurance, Technology, by Vehicle Age and, by Vehicle Type : Global Opportunity Analysis and Industry Forecast, 2023-2032

BI : Insurance

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Author's: | Onkar Sumant
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Usage-based insurance is a type of insurance policy in which the premium is directly related to the vehicle's usage. Usage-based insurance also known as pay as you drive and pay how you drive and mile-based auto insurance is a type of vehicle insurance whereby the costs are dependent upon the type of vehicle used, measured against time, distance, behavior, and place. Furthermore, telematics technology customizes insurance to understand the pattern of driving. It works by monitoring real-time driving behaviors to provide a better picture of driving habits and accordingly, a premium is charged. Insurers use UBI plans to align individuals' driving behavior with the premiums charged. The telematics device system installed in vehicles monitors the vehicle's speed, time, and distance traveled, which is then transmitted to the insurance company, which charges insurance premiums accordingly.

The global usage-based insurance for automotive market is segmented on the basis of policy type, vehicle age, vehicle type, and region. Based on policy type, the market is divided into Pay-How-You-Drive Insurance (PHYD), Pay-As-You-Drive Insurance (PAYD), Manage-How-You-Drive Insurance (MHYD), Technology (OBD-II-Based UBI Programs, Hybrid-Based UBI Programs, Smartphone-Based UBI Programs, Black-Box-Based UBI Programs. In terms of vehicle age, the market is categorized into New Vehicles, Used Vehicles. On the basis of vehicle type, the market is divided into Light-Duty Vehicle (LDV), Heavy-Duty Vehicle (HDV). Geographically, the market is analyzed across several regions such as North America, Europe, Asia-Pacific, and Latin America, Middle East & Africa (LAMEA).

COVID-19 Scenario Analysis

  • In the wake of COVID-19, consumers are revaluating traditional auto insurance policies and shifting toward usage-based products, owing to an increase in work-from-home culture, a decrease in short trips, and a global need for mile-based coverage. These factors have positively impacted the usage-based insurance for automotive market. 
  • However, the COVID-19 pandemic has led to a travel ban worldwide which has resulted in a decrease in the movement of vehicles. This led to a further decrease in the sales of usage-based insurance for automotive market. This factor hampered the growth of usage-based insurance for automotive market.

Top Impacting Factors: Market Scenario Analysis, Trends, Drivers, and Impact Analysis

Lower insurance premiums compared to regular insurance, government regulations on telematics, high adoption of telematics and connected car services, and growing on-road vehicles are expected to drive the demand for the usage-based insurance market. However, the high installation cost of telematics and various data security issues are expected to hamper the market growth. Contrarily, the adoption of advanced technology such as smartphone-based usage-based insurance (UBI) & hybrid-based UBI and increase in concerns regarding driver’s safety across the globe is expected to offer remunerative opportunities for the expansion of the market during the forecast period.

The Usage-Based Insurance For Automotive Market Trends Are As Follows:

Increasing Adoption of Telematics and Connected Cars:

Car telematics improves driving behavior, increases road safety, and aligns insurance premiums through usage-based insurance (UBI). The telematics industry is expected to grow faster than any other industry, according to the GSMA (Global System for Mobile Communications). The growth of the telematics industry can be attributed to two major factors. First, governments are increasingly willing to mandate telematics services such as emergency call capabilities. Second, there is a growing demand for more connectivity and intelligence in vehicles. According to a LexisNexis Risk Solutions whitepaper, in 2019, 80–90% of car insurance buyers had a telematics-enabled policy. Furthermore, as the demand for connected car services grows, insurance providers can assist customers in the event of an emergency, resulting in time savings and the optimization of claims processes. As a result, the growing popularity of connected car services has a significant impact on the usage-based insurance of the automotive market.

Increasing Concerns Regarding Driver’s Safety Globally:

Each year, approximately 1.3 million people are killed in road accidents, according to data compiled by the Association for Safe International Road Travel (ASIRT). It also claims that 20–50 million people have been injured or become disabled. The increased concern for driver safety is expected to attract consumers, resulting in increased demand for usage-based insurance. Young or teen drivers tend to drive roughly, can be monitored through the UBI program, lowering the likelihood of an accident. Their driving habits are tracked by the telematics device, and additional premiums are calculated on the same basis. Thus, these factors provide a lucrative opportunity for usage-based insurance for automotive market.

Key Benefits of the Report:

  • This study presents an analytical depiction of the usage-based insurance for automotive market along with the current trends and future estimations to determine the imminent investment pockets.        
  • The report presents information related to key drivers, restraints, and opportunities along with a detailed analysis of the usage-based insurance for automotive market share.          
  • The current market is quantitatively analyzed to highlight the usage-based insurance for automotive market growth scenario.           
  • Porter’s five forces analysis illustrates the potency of buyers & suppliers in the market.         
  • The report provides a detailed usage-based insurance for automotive market analysis depending on the present and future competitive intensity of the market.

Questions Answered in the Usage-Based Insurance For Automotive Market Research Report:      

  • Which are the leading players active in the usage-based insurance for automotive market?
  • What would be the detailed impact of COVID-19 on the usage-based insurance for automotive market size?
  • What are current trends that would influence the market in the next few years?
  • What are the driving factors, restraints, and opportunities of usage-based insurance for automotive market forecast?
  • What are the projections for the future that would help in taking further strategic steps?

Usage-based Insurance for Automotive Market Report Highlights

Aspects Details
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By Policy Type
  • Pay-How-You-Drive Insurance (PHYD)
  • Pay-As-You-Drive Insurance (PAYD)
  • Manage-How-You-Drive Insurance (MHYD)
  • Technology (OBD-II-Based UBI Programs
  • Hybrid-Based UBI Programs
  • Smartphone-Based UBI Programs
  • Black-Box-Based UBI Programs
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By Vehicle Age
  • New Vehicles
  • Used Vehicles
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By Vehicle Type
  • Light-Duty Vehicle (LDV)
  • Heavy-Duty Vehicle (HDV)
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By Region
  • North America  (U.S., Canada, Mexico)
  • Europe  (UK, Germany, France, Spain, Italy, Rest of Europe)
  • Asia-Pacific  (China, Japan, India, Australia, South Korea, Rest of Asia-Pacific)
  • LAMEA  (Latin America, Middle East, Africa)
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Key Market Players

Liberty Mutual Insurance, AXA, Nationwide Mutual Insurance Company, Mapfre S.A., Aviva, Progressive Corporation, Allianz SE, Allstate Corporation, Insurethebox, UNIPOLSAI ASSICURAZIONI S.P.A.

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Usage-based Insurance for Automotive Market

Global Opportunity Analysis and Industry Forecast, 2023-2032