Usage-Based Insurance tailors premiums to individual behavior and driving habits, offering potential cost savings to policyholders.
Wilmington, Delaware, United States, Oct. 02, 2023 (GLOBE NEWSWIRE) — Transparency Market Research Inc. – The usage based Insurance market was estimated to have acquired US$ 23.67 billion in 2021. It is anticipated to register a 12.54% CAGR from 2022 to 2031 and by 2031; the market is likely to gain US$ 77.14 billion. Beyond traditional policies, microinsurance and on-demand UBI are gaining prominence. These models allow customers to purchase insurance for specific periods or activities, such as short-term auto coverage for a weekend trip or temporary health coverage for a vacation.
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The integration of UBI with smart home technology presents a novel opportunity in property insurance. Insurance providers can offer customized coverage based on real-time data from connected devices, such as home security systems, leak detectors, and smoke alarms, mitigating risks and preventing losses. Health insurers are increasingly exploring UBI to encourage healthy lifestyles. Policyholders can earn discounts or rewards by meeting health and wellness goals tracked through wearable devices. This not only incentivizes healthier living but also reduces claims.
UBI is expanding beyond personal vehicles into commercial fleet management. Businesses can use telematics data to optimize vehicle use, monitor driver behavior, and reduce operational costs while maintaining comprehensive coverage. With the growing concern about data privacy, there is a burgeoning opportunity for UBI providers to offer data security and privacy services. These services assure customers that their data is protected and used only for insurance purposes, enhancing trust and compliance.
In response to increasing climate-related risks, UBI can incorporate climate data to assess and mitigate potential damages. This includes offering coverage based on specific climate conditions and helping customers prepare for extreme weather events. In the agricultural sector, UBI can help farmers manage risks associated with crop yield and livestock health.
Key Findings of the Market Report
- In the usage-based insurance market, Pay How You Drive (PHYD) policies dominate, offering customized premiums based on individual driving behavior.
- The OBD Dongle is the dominating device type in the usage-based insurance market for data collection and policy customization.
- In the usage-based insurance market, passenger vehicles dominate, with a higher adoption rate for personalized premium offerings and telematics technology.
Market Trends for Usage based Insurance
- Usage-Based Insurance is evolving to accommodate autonomous vehicles, assessing risk factors and coverage for self-driving cars.
- Pay-per-mile UBI is gaining popularity, aligning premiums with actual mileage, benefiting low-mileage drivers.
- Insurers are offering incentives and discounts to eco-friendly vehicle owners, encouraging sustainable driving practices.
- UBI models focus on driving behavior, rewarding safe practices and penalizing risky actions to promote road safety.
- UBI systems provide real-time feedback to policyholders, fostering proactive improvements in driving habits and safety.
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Market for Usage based Insurance: Regional Outlook
- North America, led by the United States and Canada, is a prominent player in the UBI market. The region boasts a robust ecosystem of telematics technology providers and insurers. Consumers in North America are increasingly adopting UBI for auto insurance, attracted by customized premiums based on driving behavior and reduced accident risk.
- Europe, with a strong presence in countries like the UK, Germany, and Italy, is witnessing substantial growth in UBI adoption. Regulatory support, including the EU’s focus on road safety, is encouraging insurers to offer telematics-based policies. European consumers are embracing UBI to lower insurance costs and improve driving habits.
- The Asia-Pacific region, encompassing nations such as China, Japan, and Australia, is emerging as a promising market for UBI. Rising car ownership, coupled with the desire for cost-effective insurance, is driving adoption. Insurers are collaborating with technology firms to offer UBI solutions that cater to the region’s diverse consumer base.
Global Usage based Insurance Market: Key Players
The usage-based insurance market features intense competition, with established insurers, technology firms, and startups vying for market share, leveraging telematics and data analytics capabilities to offer innovative solutions. The following companies are well-known participants in the global Usage based Insurance market:
- Allianz
- AllState
- Aviva
- AXA
- Generalli
- Gropama
- Insure the Box
- Liberty Mutual
- MAIF
- Progressive
- State Farm
- UnipoSai
- Uniqa
Product Portfolio
- Allianz offers a diverse product portfolio, including insurance solutions for individuals and businesses. Their offerings encompass life, health, property, casualty, and specialty insurance, providing comprehensive coverage and risk management services.
- AllState’s product portfolio features a range of insurance options, including auto, home, life, and commercial insurance. They focus on personalized policies and innovative solutions for customers’ unique needs.
- Aviva provides a wide array of insurance and financial products, spanning life, health, general insurance, and investment solutions. Their portfolio emphasizes customer-centricity and sustainable, future-focused financial planning.
Global Usage based Insurance Market Segmentation
By Policy Type
- Pay How You Drive (PHYD)
- Pay As You Drive (PAYD)
- Manage How You Drive (MHYD)
By Device Type
- Black Box
- OBD Dongle
- Smartphone
- Others
By Vehicle Type
- Passenger Vehicle
- Commercial Vehicle
By Region
- North America
- Europe
- Asia Pacific
- Middle East & Africa
- South America
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