Download Sample, Benefits of Flexible Premiums is Accelerating the Market Growth
The demand for UBI (usage-based insurance) is growing as it is personalized insurance that calculates the premiums depending on factors that include distance travelled and driving behaviour. The usage-based insurance provides several benefits. For instance, this insurance allows potential discounts, which this the prominent reason that most of the customers buy usage-based insurance. Most of insurance companies provide up to 10-15% premium discount for proper driving score. This advantage feature is driving the demand for this type of insurance among the customers. If the customer qualifies, they receive this discount every year which is an excellent reason to hold on to usage-based insurance adoption.
Additionally, the usage-based insurance programmes also encourage better-driving behaviour to the customers with the help of telematics devices. By collecting real-time data on driving behaviour like distance, speed and breaking patterns. In addition to this, many usage-based insurance systems will offer drivers tips and suggestions on how they can improve their driving skills and safety. The usage-based insurance enables quicker assessment of claim management and settlement, and also reduces the fraud on the claims which drives the growth of the market
Additionally, the usage-based insurance programmes also encourage better-driving behaviour to the customers with the help of telematics devices. By collecting real-time data on driving behaviour like distance, speed and breaking patterns. In addition to this, many usage-based insurance systems will offer drivers tips and suggestions on how they can improve their driving skills and safety. The usage-based insurance enables quicker assessment of claim management and settlement, and also reduces the fraud on the claims which drives the growth of the market
Integration of AI (Artificial Inelegancy) in the Usage-Based Insurance System is Influencing the Market Expansion
The increasing adoption of advanced technology integration in usage-based insurance systems is driving the market demand. With the leveraging of AI algorithms and IoT devices (telematics), insurers are able to collect complete real-time data on driving behavior and enable the customer to provide customized premiums based on the individual’s profiles. This increases accuracy in policy pricing, improves customer retention, and promotes safer driving habits through personalized insurance offerings. Furthermore, the telematics and tracking data collected from usage-based insurance systems are helpful for the accident investigation of the policyholder.
The collection of this data helps to the customer and insurance provider to settle claims and ensure what went wrong more accurately. Moreover, with usage-based insurance, the customer can recover the stolen vehicles, as the telematics devices are installed in vehicles. For example, if the car of the customer is stolen then the policyholder can contact to the insurer and request the GPS tracking records of the vehicle. This helps the customer by providing the exact location of the stolen vehicle.
The collection of this data helps to the customer and insurance provider to settle claims and ensure what went wrong more accurately. Moreover, with usage-based insurance, the customer can recover the stolen vehicles, as the telematics devices are installed in vehicles. For example, if the car of the customer is stolen then the policyholder can contact to the insurer and request the GPS tracking records of the vehicle. This helps the customer by providing the exact location of the stolen vehicle.
Recent Trends in the Usage-Based Insurance Industry
- Increase in claims with on-device crash detection.
- Based on Individuals driving behavior patterns customize the policies.
- Partnerships with auto manufacturers to insert telematics devices.
- Use of advanced telematic devices to increase accuracy.
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Privacy Concerns and Cost of Technology Acts as Challenge to the Market Development
The growth of usage-based insurance affects several challenges such as privacy concerns and customer perception. The policyholder may have concerns about continuous monitoring of driving behavior through telematics devices, which leads to data breaches or misuse. This is the biggest disadvantage of UBI with an increasing number of cyber-attacks. The insurer must ensure that UBI products meet the standard and security regulations to protect customers' information. Furthermore, the cost of technology used in UBI affects the expansion of the market, as implementing programs in UBI can significantly increase the maintenance cost of technology such as mobile apps and GPS tracking devices.
These costs can change depending on the program size and its scope. However, the expenses of software, hardware development, data storage services, installation, and customer support staff training will lead to increased maintenance costs. In addition to this, the usage-based insurance market faces the challenge of data accuracy and collection, UBI programs depend massively on the accuracy and reliability of the data collected from the customer's vehicle. Inaccurate data will provide inaccurate premiums, which will result in a loss of revenue for the insurer company.
These costs can change depending on the program size and its scope. However, the expenses of software, hardware development, data storage services, installation, and customer support staff training will lead to increased maintenance costs. In addition to this, the usage-based insurance market faces the challenge of data accuracy and collection, UBI programs depend massively on the accuracy and reliability of the data collected from the customer's vehicle. Inaccurate data will provide inaccurate premiums, which will result in a loss of revenue for the insurer company.
New Product Launches Present Lucrative Growth Opportunities for the Market Expansion
Major industry players are contributing to R&D to create unique products that will improve their existing product offers. They are also using various market strategies to strengthen their market position, such as mergers, product launches, acquisitions, and collaborations. For instance, in September 2023, Definity launched a new usage-based insurance that includes the customer to provide drivers unprecedented control over premiums while motiving safer driving practices. Furthermore, in March 2023, PowerFleet accomplished Movingdots, a Swiss-based provider of sustainable mobility solutions and insurance telematics, from Swiss Re. Additionally, in March 2023, Cambridge Mobile Telematics (CMT) acquired Amodo, a connected vehicle and mobility solutions provider for insurers and automotive OEMs.
Nationwide Mutual Insurance Company., Aviva Life Insurance, Allianz SE, Insurethebox, Allstate Corporation, AXA, UNIPOLSAI ASSICURAZIONI S.P.A, Mapfre S.A, Liberty Mutual Insurance Company, Progressive Casualty Insurance Company
Nationwide Mutual Insurance Company., Aviva Life Insurance, Allianz SE, Insurethebox, Allstate Corporation, AXA, UNIPOLSAI ASSICURAZIONI S.P.A, Mapfre S.A, Liberty Mutual Insurance Company, Progressive Casualty Insurance Company
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Rising Adoption of Advanced Technology is Providing Traction to the Market Expansion
North America is expected to witness substantial growth in the usage-based insurance market owing to the integration of increasing adoption of advanced technology in usage-based insurance and the availability of flexible premiums. This usage-based insurance encourages better-driving behavior to the customers with the help of telematics devices, which is implementing the growth of the market. On the other hand, in Europe the usage-based insurance market is witnessing growth in demand, due to the exceptional benefits of usage-based insurance over traditional insurance is driving the market growth.
In the UK the insurance telematics solution provider Trakm8 had a national driver survey, which showed that more than half (58%) survey’s respondents had considered telematic insurance policy to reduce the cost of car usage and mileage increase, this is increasing the growth of the market in this region. Asia Pacific is also anticipated to experience significant growth in the usage-based insurance market during the forecast period. This growth can be attributed to the rising demand for the benefits of this system among consumers.
In the UK the insurance telematics solution provider Trakm8 had a national driver survey, which showed that more than half (58%) survey’s respondents had considered telematic insurance policy to reduce the cost of car usage and mileage increase, this is increasing the growth of the market in this region. Asia Pacific is also anticipated to experience significant growth in the usage-based insurance market during the forecast period. This growth can be attributed to the rising demand for the benefits of this system among consumers.
The report provides a detailed overview of the usage-based insurance market insights in regions including North America, Latin America, Europe, Asia-Pacific, Oceania, and the Middle East and Africa. The country-specific assessment for the usage-based insurance market has been offered for all regional market shares, along with forecasts, market scope estimates, price point assessment, and impact analysis of prominent countries and regions. Throughout this market research report, Y-o-Y growth and CAGR estimates are also incorporated for every country and region, to provide a detailed view of the usage-based insurance market. These Y-o-Y projections on regional and country-level markets brighten the political, economic, and business environment outlook, which are anticipated to have a substantial impact on the growth of the usage-based insurance market. Some key countries and regions included in the usage-based insurance market report are as follows:
| North America | United States, Canada |
| Latin America | Brazil, Mexico, Argentina, Colombia, Chile, Rest of Latin America |
| Europe | Germany, United Kingdom, France, Italy, Spain, Russia, Poland, Netherlands, Belgium, Sweden, Austria, Slovakia, Hungary, Romania, Czech Republic, Rest of Europe |
| Asia Pacific | China, India, Japan, South Korea, Australia & New Zealand, Indonesia, Malaysia, Vietnam, Thailand, Rest of Asia Pacific |
| Middle East and Africa | GCC Countries, South Africa, Egypt, Turkey, Morocco, Nigeria, Iran, Rest of MEA |
Usage-Based Insurance Market Research Report Covers In-depth Analysis on:
- Usage-based insurance market detailed segments and segment-wise market breakdown
- Usage-based insurance market dynamics (Recent industry trends, drivers, restraints, growth potential, opportunities in usage-based insurance industry)
- Current, historical, and forthcoming 10 years market valuation in terms of usage-based insurance market size (US$ Mn), share (%), Y-o-Y growth rate, CAGR (%) analysis
- Usage-based insurance market demand analysis
- Usage-based insurance market regional insights with a region-wise market breakdown
- Competitive analysis – key companies profiling including their market share, product offerings, and competitive strategies.
- Latest developments and innovations in the usage-based insurance market
- Regulatory landscape by key regions and key countries
- Usage-based insurance market sales and distribution strategies
- A comprehensive overview of the parent market
- A detailed viewpoint on usage-based insurance market forecast by countries
- Mergers and acquisitions in the usage-based insurance market
- Essential information to enhance market position
- Robust research methodology
- Frequently Asked Questions -
What insights can a Usage-Based Insurance market research report provide?
A Usage-Based Insurance market research report provides analysis on market trends, growth drivers, challenges, competitive landscape, regulatory impacts, and forecasts, helping stakeholders make informed strategic decisions.
Why is Usage-Based Insurance gaining popularity in the automotive and insurance sectors?
Usage-based insurance is popular due to its personalized premiums, real-time driving behavior analysis, and cost-effectiveness, offering significant value to insurers and policyholders alike.
What factors are driving the growth of the Usage-Based Insurance market?
Key growth factors include advancements in telematics, increasing demand for customized insurance plans, and rising consumer awareness about cost-efficient insurance models.
