The Usage-based insurance market for automotive is estimated to be USD 28.43 billion in 2018 and is projected to reach USD 95.81 billion by 2025, at a CAGR of 18.95% from 2018 to 2025. The increasing number of vehicles with telematics and connected car services and a reduction in insurance premiums as compared to regular insurance are projected to drive the usage-based insurance market.
Browse 78 market data Tables and 48 Figures spread through 157 Pages and in-depth TOC on “Usage-based Insurance Market”
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Some of the key Players in Usage-based Insurance Market:
- Progressive Corporation (US)
- Vodafone (UK), Allstate (US)
- Octo Telematics (UK)
- TomTom (Netherlands)
- Allianz (Germany)
- AXA (France)
- Liberty Mutual (US)
- Verizon (US)
- Sierra Wireless (Canada)
Increasing vehicle with telematics and connected car services to drive the global usage-based insurance for automotive demand close to USD 96 billion by 2025
The usage-based insurance for automotive is a method to calculate the insurance premium. The amount of insurance premium is decided on the basis of a driving score which is calculated by considering factors such as vehicle usage, location, speeding, braking, cornering, night driving, and distracted driving. Based on the driving score, automotive insurance providers offer a discount on the insurance premium.
Ambiguity over regulations and legislative environments are acting as a restraint for the usage-based insurance market as usage-based insurance providers need to plan new product for different states with in a country.
Pay-As-You-Drive (PAYD) package type is projected to have the largest market in the usage-based insurance market
Pay-As-You-Drive (PAYD) package type is estimated to be the largest market for usage-based insurance, by package type, during the forecast period. Various factors affecting the dominance of PAYD are ease of deployment, no complex algorithms for working, and cost-effectiveness for the insurer as well as consumers. Secondly, PAYD insurance encourages consumers to drive less and drive green. This reduces vehicle emissions and contributes to the worldwide environmental efforts. As people drive less, the accidental risks associated with drivers reduce.
On-road vehicles are estimated to have the fastest growth in the usage-based insurance market
The number of on-road vehicles is very high when compared to new vehicles sold for a particular year, as on-road vehicles is a collective total. The penetration of usage-based insurance is lower in on-road vehicles as compared to new vehicles; however, owing to the huge difference in new vehicle sales and on-road vehicles, the usage-based insurance market for on-road vehicles is the highest in 2018 and is projected to be the largest market by 2025 as well. The increase of usage-based insurance in new vehicles will also drive the market for on-road vehicles as the usage-based insurance service providers offer discounts and loyalty bonus for renewals. Hence, multiple car owners are expected to continue using usage-based insurance as their vehicle gets older.
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