Usage-based Insurance Market, Trends & Analysis - Forecasts To 2025 By Type (Pay-As-You-Drive(PAYD), Pay-How-You-Drive(PHYD), Manage-How-You-Drive(MHYD), Distance-Based Insurance) By Telematics Solutions (Dongle, Black Box, Embedded, Smartphones), By Method of Premium Collection (Debit Accounts, Direct Billing, Smart Card Systems) By Region (North America, Europe, Asia Pacific, Central & South America, and Middle East & Africa); Vendor Landscape, and Company Market Share Analysis & Competitor Analysis - Global Market Estimates
Usage-based Insurance Market Insights
The Usage-based Insurance Market is expected to grow at a significant CAGR during the forecast period. There are various factors driving the usage-based insurance market, some of them being decreased accident rates and vehicle theft possibilities, flexible insurance premium, lower fuel consumption, and timely and accurate data collection.
The usage-based insurance system is also known as a telematics-based insurance system, which provides premium based on the driving behavior of the consumers. The premiums are charged based on what type of roads are used, braking and cornering patterns used by the consumer.
The factors boosting the market growth are lower chances of incurring accidents and vehicle theft as the driving behavior of consumers are being monitored by the insurance companies. Another factor expected to boost market growth could be technological advancements in smart vehicles. Hybrid technology-based solutions and smartphones play a very important role in driving the market growth.
The usage-based insurance market is being used to avoid the manipulation and forging of driving data such as speed, braking, corner cutting and time during an accident. The data helps insurance companies to analyze and provide customized user-based insurance products based on the scenario.
High technological process and an increase in the cost of installation are some factors likely to hinder growth in the usage-based insurance market. The increase of the operating expense of the user based insurance could act as a barrier to the growth of the market as well.
Usage-based Insurance Market: By Type
The usage-based insurance system can be segmented into four types; Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), Manage-How-You-Drive (MHYD) and Distance-Based insurance. PAYD has been popular and most used insurance system is among the North American drivers.
The manage-how-you-drive segment is expected to grow at a faster rate over the forecast period, owing to its feature of high flexibility and freedom to the customers. MHYD segment provides all the information to the consumers including their fuel consumption rate and others.
Usage-based Insurance Market: By Telematics Solutions
The Usage-based Insurance Market can be segmented based on the Telematics solution into the dongle, black box, embedded and smartphones. It is anticipated that the growing use of these technologies will drive the market during the forecast period. The black box technology is expected to contribute most to the revenue share in the telematics solutions. Whereas, increased use of smartphone technology is expected to register the highest CAGR during the forecast period.
Usage-based Insurance Market: By premium collection
The market for usage-based insurance can be segmented based on the premium collection into debit account, direct billing, and smart card systems. The debit account is expected to hold the largest market share in this segment. The actuaries of the insurance companies are trusted with the responsibility of charging the correct premium from the consumers.
With the advancement of technology, the market share of smart card system is expected to register the highest CAGR during the forecast period.
Usage-based Insurance Market: Regional Insights
Europe is expected to dominate the market of the telematics system, with Italy contributing its majority share. The region’s dominance can be attributed to the various factors one of them being well-developed infrastructure and also due to the presence of well-established and sustainable economies in the region. North America has the second highest market of usage based insurance system, with U.S contributing its majority share. Technological advancements, awareness about safety precautions and high adoption rate of smart technologies are some factors expected to positively impact the market for usage based insurance over the world.
Usage-based Insurance Market: End-Use Landscape
The end-use landscape entails a list of current and prospective consumers prevailing across the regions. This section provides company addresses, contact details, products, and regional presence of companies who are purchasing or are likely to purchase usage based insurance over the coming years. Some companies likely to purchase usage-based insurance in the coming years are Liberty Mutual, Nationwide and Allstate among others.
Usage-based Insurance Market: Vendor Landscape
The report contains a chapter dedicated to vendors operating in the market, covering raw material manufactures, equipment developers, manufacturers, and distributors. The report provides these insights on a regional level. This section of the report entails contact details, experience, products manufactured/supplied, and geographical presence of companies.
Usage-based Insurance Market: Share & Competitor Analysis
Some of the key players operating in the Usage-based Insurance Market are AXA S.A., Insure The Box Ltd., Allianz SE, Allstate Corporation, Generali Group, Metromile, Aviva plc, Desjardins Insurance, Progressive Corporation, Admiral Group Plc., AI Insurance Holdings Pty Ltd. Box Innovation Group Ltd. and others.
Please note: This is not an exhaustive list of companies profiled in the report.
According to a report, it was estimated that the US household share in user based insurance policies has increased to 20% in 2016.
In the year 2016, Progressive Insurance signed a partnership agreement with an U.S. based telematics solutions provider Zubie.
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The global Usage-based Insurance Market has been studied from the year 2016 till 2025. However, the CAGR provided in the report is from the year 2017 to 2025. The research methodology involved three stages: Desk research, Primary research, and Analysis & Output from the entire research process.
The desk research involved a robust background study which meant referring to paid and unpaid databases to understand the market dynamics; mapping contracts from press releases; identifying the key players in the market, studying their product portfolio, competition level, annual reports/SEC filings & investor presentations; and learning the demand and supply side analysis for the Usage-based Insurance Market.
The primary research activity included telephonic conversations with more than 50 tier 1 industry consultants, distributors, and end-use product manufacturers.
Finally, based on the above thorough research process, an in-depth analysis was carried out considering the following aspects: market attractiveness, current & future market trends, market share analysis, SWOT analysis of the company.
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