Global Automotive Usage-based Insurance Market

Global Automotive Usage-based Insurance Market by Insurance Type (Pay-how-you drive (PHYD), Pay-as-you drive (PAYD), Distance based insurance and Manage-how-you drive (MHYD)), By Vehicle Type (Passenger Cars (Compact Cars, Luxury Cars and SUVs), Light Commercial Vehicle and Heavy Commercial Vehicle), By Technology (OBD-II, Smartphone, Blackbox, and Embedded Telematics), By Vehicle Age (New Vehicles and On-Road Vehicles), and By Region (North America, Europe, Asia Pacific, South America, and Middle East & Africa)

Global Automotive Usage-based Insurance Market Overview:

Automotive Usage-based Insurance is premium-based insurance. UBI car insurance can be understood as a kind of insurance based on driving behavior. The driving habits of drivers are connected through connected devices such as the Internet of Vehicles, smartphones, and OBD, driving technology, vehicle information, and the surrounding environment that are integrated to establish a multi-dimensional model of people, vehicles, and roads (environment) for pricing. At the same time, some insurance companies have tried to launch UBI non-auto insurance. UBI can bring benefits to insurance companies, including reasonable pricing, scientific products, accurate customer acquisition, reduction of accidents, the decline in payment rate, improvement of operational efficiency, and improvement of customer experience.

Global Automotive Usage-based Insurance Market Insights

Global automotive usage-based insurance market size valued at USD 29.7 billion in 2019, which expected to reach USD 138.7 billion by 2027, growing at a CAGR of 18.08% during the forecast period, 2020–2027. It is primarily attributed to factors such as growing demand for telematics and connected car services. Additionally, the rising popularity of usage-based insurance services among insurance enterprises for improving business profitability is estimated to boost the growth of the global automotive usage-based insurance market. Moreover, the applications of usage-based insurance such as flexible insurance premium, lower accident & vehicle theft possibilities, accurate & timely data collection, and lower consumption are accelerating the demand of the automotive usage-based insurance industry.

Furthermore, the rise in new sales of vehicles with OE fitted telematics devices are facilitating the demand rise for automotive usage-based insurance. Automotive usage-based insurance performs several functions simultaneously, such as detection and prevention of various fraud, a decrease of the combined ratio, and fuel consumption and car wear control. Also, the shifting focus of automotive insurance providers toward remote diagnostics and enabling enterprises to differentiate their offerings will create opportunity for growth of the global automotive usage-based insurance industry. Additionally, growing production and sales of automobiles in the developing countries, changing driving habits coupled with the rise in affluent middle class population in these nations are expected to fuel the market growth in the analysis period. Moreover, technological advancements, including smartphones and hybrid-technology-based solutions, will spur the demand for automotive usage-based insurance in the upcoming periods.

Growth Driver

Shifting focus towards remote diagnostic technology

Automobile remote diagnosis technology is the future development direction of automobile diagnosis technology. The car remote diagnosis system is a system that combines car diagnosis technology with the Internet to realize remote vehicle fault diagnosis and repair and reduce vehicle maintenance costs. The main difference between remote diagnosis technology and traditional diagnosis technology lies in the ability of vehicle manufacturers to change from passive diagnosis to active diagnosis, to be able to perform remote diagnosis of vehicles at any time or regularly, and to repair faults remotely (with the help of OTA technology).

When the vehicle has a fault, the vehicle can report the fault code to the cloud diagnostic platform in time, and the cloud diagnostic platform can judge the fault according to the fault code.

Growth in the number of the connected cars bringing new UBI opportunities

In the automotive sector, the main growth is in connected car equipment. In 2018, the installed base of automotive IoT terminals reached 270 million units. By the end of 2020, the car is expected to have 470 million IoT terminal points, and by the end of 2019, 3.6 billion terminal points will be in use. The use and demand of consumers around the world for connected car navigation, infotainment services, and driving support systems are significantly higher than average. Internet of Vehicles is of great significance for promoting the integration and upgrading of the automobile, transportation, and information and communication industries, as well as the reshaping of related industry ecology and value chain systems.

Insurance Type Segmental Analysis

Based on Insurance type, the global automotive usage-based insurance market classified into Pay-how-you drive (PHYD), Pay-as-you-drive (PAYD), Distance-based insurance, and Manage-how-you drive (MHYD). The Pay-as-you-drive (PAYD segment held maximum revenue share in 2019. It is attributable to the surge in demand for PAYD for the reaping the benefits of mileage-based insurance premiums, and it covers how much drive, as opposed to the type of general car insurance most, will be used to.

Pay-how-you drive (PHYD) will be growing with an excellent CAGR in the forecast period. It is owing to its works by continually monitoring driver car, and providing metrics such as time of drive, how hard driver brake, Sharpness of turns and how quickly the driver accelerates.

Vehicle Type Segmental Analysis

Based on vehicle type, the global automotive usage-based insurance market segregated into Passenger Cars (Compact Cars, Luxury Cars, and SUVs), Light Commercial Vehicle, and Heavy Commercial Vehicle. Passenger Cars segment accounted for a higher revenue share in 2019 and projected to dominate the automotive usage-based insurance market by 2027. It is primarily attributed to it help passengers’ cars to improve driving habits, leading to reduced insurance premiums and rewards for safe driving. Additionally, the surge in the adoption of blackbox and OBD devices for monitoring the vehicle’s condition will demand a UBI-based passenger car in the near future.

The light commercial vehicle will grow with a lucrative growth rate in the forecast period. It is due to the rise in demand light commercial vehicles equipped with advanced telematics-based platforms to monitor driving habits and prevent any sudden failures.

Technology Segmental Analysis

Based on technology, the global automotive usage-based insurance market classified into OBD-II, Smartphone, Blackbox, and Embedded Telematics. Embedded Telematics segment anticipated registering a lucrative growth during the forecast period. It is owing to it is very accurate at capturing vehicle data as it is an integrated part of the vehicle and does not require external calibration to register data. It allows greater flexibility for the OEMs’ business model and enable them to offer innovative services demanded by consumers such as navigation and on-board infotainment.

The OBD-II battery held a significant market share in 2019. It is due to the OBD-II help in diagnostics services in workshops and serving as a physical reminder of the driver’s connection to the vehicle.

Vehicle Age Segmental Analysis

Based on vehicle age, the global automotive usage-based insurance market bifurcates into new vehicles and on-road vehicles. The new vehicle segment expected to grow at the highest CAGR during the forecast period on account of the growing sales of new cars and vehicles embedded with telematics technology.

On-road vehicles will hold a substantial market share in 2019. It is due to the rise in awareness among people about technological advancements in the automotive industry.

Region Segmental Analysis

Based on geography, the global automotive usage-based insurance market segmented into North America, Europe, Asia Pacific, South America, and Middle East & Africa. North America is slated to account for a significant share by 2027 in the automotive usage-based insurance market. The growth in the region can be attributed to the presence of leading UBI companies, along with these companies adopting various initiatives to enhance capabilities with the introduction of innovative solutions for connected cars and autonomous vehicles.

Europe is projected to provide significant growth opportunities due to growth in the number of connected cars in the region, coupled with the sustained rise in the adoption of telematics solutions for augmenting insurance telematics programs.

Competitor Analysis

Companies such as Allianz SE, Allstate Insurance Company, ASSICURAZIONI GENERALI SPA, AXA, Cambridge Mobile Telematics, Danlaw, Inc., Desjardins Group, Insure The Box Limited, Intelligent Mechatronic Systems Inc., Liberty Mutual Insurance, Mapfre, S.A., Metromile Inc., Nationwide, Octo Technology, Progressive Casualty Insurance Company, Sierra Wireless, State Farm Mutual Automobile Insurance Company, TomTom International BV, UnipolSai Assicurazioni S.p.A., Vodafone Automotive SpA, and Zubie, Inc are the key players in the global automotive usage-based insurance market.

Key Stakeholders

  • Market research and consulting firms
  • Industry associations
  • Global automotive usage-based insurance service providers
  • Research organizations and consulting companies
  • Organizations, associations, and alliances related to automotive usage-based insurance
  • Regulatory bodies
  • Suppliers
  • Retailers

The objective of the Research

  • Market modeling starts with identifying a target market where historical data exists. A Market can include prediction problems, economic factors, analyzing customer behavior, and identifying new patterns from past events, which helps our client to have deep dive into the market.
  • Product analysis involves steps such as examining product features, costs, availability, quality, and other aspects. Product analysis is conducted to understand potential buyers and measure competition in the market.
  • Market Trend and Economic Factors Analysis helps in assessing potential changes to an economy’s inflation rate, taxes, interest rates, exchange rates, trading regulations, and excise duties that can or have a major effect on the target market.
  • Market Segmental Analysis defines in-depth scenario of the target market by the process of grouping consumers into naturally existing created segments of consumers who share similar product preferences or characteristics
  • The geographical mapping approach helps our clients to understand national or international markets because different consumers in different regions have different needs wants, and cultural characteristics that can be specifically targeted.

Market Modelling

By Insurance Type

  • Pay-how-you drive (PHYD)
  • Pay-as-you drive (PAYD)
  • Distance based insurance
  • Manage-how-you drive (MHYD)

By Vehicle Type

  • Passenger Cars
    • Compact Cars
    • Luxury Cars
    • SUVs
  • Light Commercial Vehicle
  • Heavy Commercial Vehicle

By Technology

  • OBD-II
  • Smartphone
  • Blackbox
  • Embedded Telematics

By Vehicle Age

  • New Vehicles
  • On-Road Vehicles

By Region

  • North America
  • Europe
  • Asia Pacific
  • South America
  • Middle East & Africa

Global Automotive Usage-Based Insurance Market

Report Content

  1. Research Strategic Development
    • Market Modelling
    • Product Analysis
    • Market Trend and Economic Factors Analysis
    • Market Segmental Analysis
    • Geographical Mapping
    • Country Wise Segregation
  2. Research Methodology
    • Identification of Target Market
    • Data Acquisition
    • Refining of Data/ Data Transformations
    • Data Validation through Primary Techniques
    • Exploratory Data Analysis
    • Graphical Techniques/Analysis
    • Quantitative Techniques/Analysis
    • Visual Result/Presentation
  3. Executive Summary
  4. Market Insights
    • Economic Factor Analysis
      • Drivers
      • Trends
      • Opportunities
      • Challenges
    • Technological Landscape
    • Competitors & Product Analysis
    • Regulatory Framework
    • Company market share analysis, 2019
    • Porter’s Five forces analysis
    • New Investment Analysis
    • PESTEL Analysis
  5. Global Automotive Usage-Based Insurance Market Overview
    • Market Size & Forecast, 2016-2027
      • Demand
        • By Value (USD Million)
      • Market Share & Forecast, 2016-2027
        • By Insurance Type
          • Pay-how-you drive (PHYD)
          • Pay-as-you drive (PAYD)
          • Distance based insurance
          • Manage-how-you drive (MHYD)
        • By Vehicle Type
          • Passenger Cars
            • Compact Cars
            • Luxury Cars
            • SUVs
          • Light Commercial Vehicle
          • Heavy Commercial Vehicle
        • By Technology
          • OBD-II
          • Smartphone
          • Blackbox
          • Embedded Telematics
        • By Vehicle Age
          • New Vehicles
          • On-Road Vehicles
        • By Region
          • North America
          • Europe
          • Asia Pacific
          • South America
          • Middle East & Africa
  1. North America Automotive Usage-Based Insurance Market Overview
    • North America Automotive Usage-Based Insurance Market Size & Forecast, 2016-2027
      • Demand
        • By Value (USD Million)
      • North America Automotive Usage-Based Insurance Market Share & Forecast, 2016-2027
        • By Insurance Type
          • Pay-how-you drive (PHYD)
          • Pay-as-you drive (PAYD)
          • Distance based insurance
          • Manage-how-you drive (MHYD)
        • By Vehicle Type
          • Passenger Cars
            • Compact Cars
            • Luxury Cars
            • SUVs
          • Light Commercial Vehicle
          • Heavy Commercial Vehicle
        • By Technology
          • OBD-II
          • Smartphone
          • Blackbox
          • Embedded Telematics
        • By Vehicle Age
          • New Vehicles
          • On-Road Vehicles
        • By Country
          • US
          • Canada
          • Mexico
        • Price-Point Analysis
        • Company Market Share (Top 3-5)
        • Economic Impact Study on North America Automotive Usage-Based Insurance Market
  1. Europe Automotive Usage-Based Insurance Market Overview
    • Europe Automotive Usage-Based Insurance Market Size & Forecast, 2016-2027
      • Demand
        • By Value (USD Million)
      • Europe Automotive Usage-Based Insurance Market Share & Forecast, 2016-2027
        • By Insurance Type
          • Pay-how-you drive (PHYD)
          • Pay-as-you drive (PAYD)
          • Distance based insurance
          • Manage-how-you drive (MHYD)
        • By Vehicle Type
          • Passenger Cars
            • Compact Cars
            • Luxury Cars
            • SUVs
          • Light Commercial Vehicle
          • Heavy Commercial Vehicle
        • By Technology
          • OBD-II
          • Smartphone
          • Blackbox
          • Embedded Telematics
        • By Vehicle Age
          • New Vehicles
          • On-Road Vehicles
        • By Country
          • Germany
          • UK
          • France
          • Italy
          • Rest of Europe
        • Price-Point Analysis
        • Company Market Share (Top 3-5)
        • Economic Impact Study on Europe Automotive Usage-Based Insurance Market
  1. Asia Pacific Automotive Usage-Based Insurance Market Overview
    • Asia Pacific Automotive Usage-Based Insurance Market Size & Forecast, 2016-2027
      • Demand
        • By Value (USD Million)
      • Asia Pacific Automotive Usage-Based Insurance Market Share & Forecast, 2016-2027
        • By Insurance Type
          • Pay-how-you drive (PHYD)
          • Pay-as-you drive (PAYD)
          • Distance based insurance
          • Manage-how-you drive (MHYD)
        • By Vehicle Type
          • Passenger Cars
            • Compact Cars
            • Luxury Cars
            • SUVs
          • Light Commercial Vehicle
          • Heavy Commercial Vehicle
        • By Technology
          • OBD-II
          • Smartphone
          • Blackbox
          • Embedded Telematics
        • By Vehicle Age
          • New Vehicles
          • On-Road Vehicles
        • By Country
          • China
          • India
          • Japan
          • Australia
          • Rest of Asia Pacific
        • Price-Point Analysis
        • Company Market Share (Top 3-5)
        • Economic Impact Study on Asia Pacific Automotive Usage-Based Insurance Market
  1. South America Automotive Usage-Based Insurance Market Overview
    • South America Automotive Usage-Based Insurance Market Size & Forecast, 2016-2027
      • Demand
        • By Value (USD Million)
      • Consumption
    • South America Automotive Usage-Based Insurance Market Share & Forecast, 2016-2027
      • By Insurance Type
        • Pay-how-you drive (PHYD)
        • Pay-as-you drive (PAYD)
        • Distance based insurance
        • Manage-how-you drive (MHYD)
      • By Vehicle Type
        • Passenger Cars
          • Compact Cars
          • Luxury Cars
          • SUVs
        • Light Commercial Vehicle
        • Heavy Commercial Vehicle
      • By Technology
        • OBD-II
        • Smartphone
        • Blackbox
        • Embedded Telematics
      • By Vehicle Age
        • New Vehicles
        • On-Road Vehicles
      • By Country
        • Brazil
        • Argentina
        • Rest of South America
      • Price-Point Analysis
      • Company Market Share (Top 3-5)
      • Economic Impact Study on South America Automotive Usage-Based Insurance Market
  1. Middle East & Africa Automotive Usage-Based Insurance Market Overview
    • Middle East & Africa Automotive Usage-Based Insurance Market Size & Forecast, 2016-2027
      • Demand
        • By Value (USD Million)
      • Middle East & Africa Automotive Usage-Based Insurance Market Share & Forecast, 2016-2027
        • By Insurance Type
          • Pay-how-you drive (PHYD)
          • Pay-as-you drive (PAYD)
          • Distance based insurance
          • Manage-how-you drive (MHYD)
        • By Vehicle Type
          • Passenger Cars
            • Compact Cars
            • Luxury Cars
            • SUVs
          • Light Commercial Vehicle
          • Heavy Commercial Vehicle
        • By Technology
          • OBD-II
          • Smartphone
          • Blackbox
          • Embedded Telematics
        • By Vehicle Age
          • New Vehicles
          • On-Road Vehicles
        • By Country
          • Saudi Arabia
          • UAE
          • South Africa
          • Rest of Middle East & Africa
        • Price-Point Analysis
        • Company Market Share (Top 3-5)
        • Economic Impact Study on Middle East & Africa Automotive Usage-Based Insurance Market
  1. Competitor Analysis
    • Company Description
    • Financial Analysis
    • Key Products
    • Key Management Personnel
    • Contact Address
    • SWOT Analysis
    • Company Profile
      • Allianz SE
      • Allstate Insurance Company
      • Assicurazioni Generali S.p.A
      • AXA
      • Cambridge Mobile Telematics
      • Danlaw, Inc.
      • Desjardins Group
      • Insure The Box Limited
      • Intelligent Mechatronic Systems Inc.
      • Liberty Mutual Insurance
      • Mapfre, S.A.
      • Metromile Inc.
      • Nationwide
      • Octo Technology
      • Progressive Casualty Insurance Company
      • Sierra Wireless
      • State Farm Mutual Automobile Insurance Company
      • Others Prominent Players