What's driving the Usage-based Insurance Market growth? Key Players are: Allstate, State Farm, Allianz, Liberty Mutual, UnipolSai, Metromile, TomTom, Progressive, Desjardins Group, Sierra Wireless

North America is projected to hold a dominant share of around 38% in the UBI market by 2024. The market growth is driven by an increase in the use of telematics systems that are equipped with features such as vehicle tracking systems, remote theft alarm, and driver assistance systems. The rising incidents of vehicle theft in this region are expected to augment the UBI market growth. According to the Insurance Information Institute, in 2017, around 773,139 vehicles were stolen in the U.S. as compared to 767,290 vehicles in 2016. The adoption of telematics-driven UBI helps insurers to improve profitability and reduce fraudulent claims. A massive growth of the connected cars market and an increased use of smartphone telematics for monitoring driver behavior will accelerate the UBI market growth over the forecast timeline.

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Usage-based Insurance (UBI) market is projected to surpass USD 107 billion by 2024. The growing implementation of vehicle telematics to improve driving behavior and align car insurance premiums with the actual vehicle condition via UBI has accelerated the automotive insurance industry?s profitability. UBI relies on telematics data to evaluate risks based on each individual?s driving behavior, inclination towards safe driving practices, the current condition of vehicles and trip characteristics. By combining these factors with the traditional rating metrics, it enables insurers to offer the best drivers with a maximum discount and provides value-added services to serve customer interests more effectively. It also allows drivers to control the cost of their insurance by paying how they drive and provides them with a way to monitor real-time vehicle data. UBI enables the detection of stolen vehicles through a GPS in the telematics device connected to the vehicle and lowers the chances of vehicle accidents by monitoring the drivers? behavior. These factors are expected to augment the demand for UBI.

The commercial vehicles segment is estimated to show the fastest growth rate of over 18% from 2018 to 2024 due to the adoption of telematics and other vehicular technologies to support the growth of the commercial vehicle transportation industry. Commercial vehicles leverage these technologies to increase the driving efficiency via real-time communications. Transportation companies can share the telematics data with the insurance companies and help them in setting premium rates and discounts for customers based on their driving behavior records. UBI helps in improving driver safety and reducing accidents by encouraging safe driving practices with a real-time feedback. Also, it provides fleet managers with deep insights about the driver?s behavior, along with the fleet operating data that ensures safer fleet operations.

UBI market is expected to witness a sharp growth over the forecast timeline owing to the rapid development and adoption of connected cars. These cars are equipped with sensors that monitor miles driven, location, route, driver?s behavior, and vehicle data including the temperature and tire pressure. This data is then used by the insurers to influence driving behavior, increase claim-processing efficiency, and lower insurers? losses by enabling the detection of fraudulent claims. Other factors driving the UBI market growth are the penetration of insurance telematics in passenger & commercial vehicles and the growing trend of Try-Before-You-Buy (TBYB) insurance packages. The TBYB model allows drivers to use a smartphone application that gathers data, enabling insurers to analyze risks before insuring the driver. The new solution also enables policy-holders to make sure that the policies are tailored according to their needs.

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The OBD-II technology held a major market share of around 50% in 2017 and is projected to dominate the market between 2018 and 2024. Earlier OBD devices were used to read fault codes and parameters associated with the malfunctioning of the emission systems. But with the growing trend of IoT, OBD dongles embedded with sensors are being used to detect hard breaks and accelerations, thus determining driving patterns, fuel efficiency, and road conditions. As these dongles are easy to install, they are being widely used for tracking the vehicle?s systems and the driving pattern.

The PHYD segment is projected to hold a major market share of around 66% by 2024. PHYD insurance aims at charging premiums according to an individual?s driving habits, which help insurers to offer premiums that are more tailored to individual drivers. The insurers can set the rates based on driving skills and the time from when the user is most likely to be driving. Many insurers also share data with their clients to allow them to monitor their own driving behavior.

The companies operating in the UBI market are introducing new products to cater to the needs of the passenger vehicle drivers and fleet managers. For instance, in October 2018, Autonet launched a UBI private car product for drivers using VisionTrack?s video telematics solutions. This solution monitors the driving behavior and checks factors such as where the vehicle was driven and where it was kept overnight that can affect the insurance policy.

Insurance companies are also entering into strategic partnerships with the telematics solution providers for developing new solutions. For instance, in March 2018, Octo Telematics partnered with RCI Bank and Services to provide its telematics services for vehicles worldwide. As a part of its sales process, RCI Bank offers its customers an option to use the Octo device in their cars to improve customer loyalty and relationship. Under this partnership, Octo also develops a complete profile of each driver to monitor the driving style and vehicle conditions. This allows the bank to offer tailored services based on each driver?s specific profile.

Table of Content:

Chapter 1. Methodology & Scope

1.1. Methodology

1.1.1. Initial data exploration

1.1.2. Statistical model and forecast

1.1.3. Industry insights and validation

1.1.4. Scope

1.1.5. Definition

1.1.6. Methodology and forecast parameters

1.2. Data Sources

1.2.1. Primary

1.2.2. Secondary

1.2.2.1. Paid sources

1.2.2.2. Public sources

Chapter 2. Executive Summary

2.1. UBI technology industry 360 degree synopsis, 2015- 2024

2.1.1. Region trends

2.1.2. Package trends

2.1.2.1. Pay-How-You-Drive (PHYD)

2.1.2.2. Pay-As-You-Drive (PAYD)

2.1.2.2.1. Device-based

2.1.2.2.2. Telematics-based

2.1.3. Technology trends

2.1.3.1. OBD-II

2.1.3.2. Smartphone

2.1.3.3. Black Box

2.1.3.4. Embedded telematics

2.1.4. Vehicle type trends

2.1.4.1. Passenger vehicle

2.1.4.2. Commercial vehicle

Chapter 3. UBI technology industry Insights

3.1. Introduction

3.2. Industry segmentation

3.3. Industry landscape, 2015-2024

3.4. UBI technology ecosystem analysis

3.4.1. Insurance companies

3.4.2. Automakers

3.4.3. Telematics solution providers

3.4.4. Smartphone providers

3.4.5. Telecom service providers

3.4.6. OBD device manufacturers

3.4.7. End users

3.5. Advantages of UBI

3.6. Working/Architecture of UBI technology

3.7. Technology & innovation landscape

3.7.1. IoT

3.7.2. AI and machine learning

3.7.3. 5G

3.7.4. Manage-How-You-Drive (MHYD)

3.8. OBD Standards

3.8.1. The California Air Resources Board (CARB)

3.8.2. The U.S. Environmental Protection Agency (EPA) Heavy Duty Engine Standards

3.8.3. The Society of Indian Automobile Manufacturers (SIAM)

3.8.4. The European OBD Standards

3.8.5. OBD II Standards

3.8.6. China VI Emission Standards

3.9. Regulatory landscape

3.9.1. General Data Protection Regulation (GDPR), Europe

3.9.2. Telematics In-Vehicle USD Million (IVU) Functional and Technical Specification, Australia

3.9.3. Compliance and enforcement framework for heavy vehicle telematics, NTC Australia

3.9.4. CSA 2010 (Compliance and Enforcement Program), U.S.

3.9.5. Automotive Industry Standard (AIS-140) Regulation

3.10. Industry impact forces

3.10.1. Growth drivers

3.10.1.1. Growth of the automobile industry

3.10.1.2. Shifting focus towards remote diagnostic technology

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

3.10.1.4. Rising penetration of smartphones integrated with vehicle connectivity systems

3.10.1.5. Rapid use of UBI by insurance companies to improve profitability

3.10.1.6. Growing trend of Try-Before-You-Buy (TBYB) insurance model

3.10.2. Industry Pitfalls and Challenges

3.10.2.1. Data security and privacy concerns

3.10.2.2. Data quality issues with smartphone based UBI system

3.10.2.3. Increasing compatibility issues

3.11. Porter's Analysis

3.11.1. Threat of new entrants

3.11.2. Threat of substitutes

3.11.3. Bargaining power of buyer

3.11.4. Bargaining power of supplier

3.11.5. Industry rivalry

3.12. PESTEL analysis

3.13. Growth potential analysis

Chapter 4. Competitive Landscape, 2017

4.1. Introduction

4.2. Competitive analysis of key market players

4.2.1. Allstate Insurance Company

4.2.2. Liberty Mutual Insurance

4.2.3. State Farm Mutual Automobile Insurance Company

4.2.4. UnipolSai Assicurazioni S.p.A.

4.3. Competitive analysis of other prominent vendors

4.3.1. Allianz SE

4.3.2. AXA

4.3.3. Insure The Box Limited

4.3.4. Metromile Inc.

Chapter 5. UBI Technology Market, By Package

5.1. Key trends, by package

5.2. PHYD

5.2.1. PHYD market estimates and forecast, 2015-2024

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Related Report:

Global Automotive UBI (Usage-based Insurance) Market Growth (Status and Outlook) 2018-2023

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.

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