Growing Vehicle Ownership Boosts Growth Of The Automotive Usage-Based Insurance Market Driver: Leading Transformation in the Automotive Usage-Based Insurance Market in 2025

What Are the Projected Growth and Market Size Trends for the Automotive Usage-Based Insurance Market?
Over the past few years, the automotive usage-based insurance sector has seen speedy expansion. Predictions estimate that the market, which was valued at $48.9 billion in 2024, will increase to $57.91 billion in 2025, reflecting an impressive compound annual growth rate (CAGR) of 18.4%. The past growth can be linked to several factors, including increased insurance premiums, the proliferation of connected vehicles, the need for better risk assessment, policy adjustments favoring usage-based models, and the widespread use of mobile applications.

The market size of insurance based on automotive usage is predicted to witness a substantial surge in the upcoming years, potentially reaching $112.35 billion by 2029 with a Compound Annual Growth Rate (CAGR) of 18.0%. The projected growth during the forecast period can be attributed to the advancements in Artificial Intelligence and machine learning, improved data privacy and security protocols, integration with innovative home technology, expansion in subscription-based insurance models, and escalating environmental consciousness. The primary trends during this period will be the application of AI and machine learning for superior risk evaluation, the surge in personalized and flexible insurance models, the growing acceptance of telematics in electric vehicles, usage of real-time data from linked and autonomous vehicles, and the expansion in subscription-based arrangements.

What Is Driving the Growth Trajectory of the Automotive Usage-Based Insurance Market?
The automotive usage-based insurance market is set to expand due to increasing vehicle ownership. Vehicle ownership, which refers to an individual or entity possessing and registering a motorized vehicle, entails having the vehicle's rights and responsibilities. The surge in vehicle ownership is fueled by economic growth, increased disposable income, urbanization, and a growing demand for personal mobility. Automotive usage-based insurance (UBI) offers cheaper premiums to safe and low-mileage drivers, providing tailored rates based on their driving habits, appealing to budget-conscious car owners. For example, as per Statistics Canada, a government agency in Canada, there were 26.3 million road motor vehicles registered in Canada in 2022, marking a 0.3% rise from 2021, according to data released in June 2024. Thus, the rise in vehicle ownership serves as a catalyst for the growth of the automotive usage-based insurance market.

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Which Leading Companies Are Shaping the Growth of the Automotive Usage-Based Insurance Market?
Major companies operating in the automotive usage-based insurance market are State Farm, MetLife Services and Solutions LLC, Nationwide Mutual Insurance Company, Allstate Insurance Company, Progressive Casualty Insurance Company, Chubb Limited, The Travelers Indemnity Company, Aviva plc, Government Employees Insurance Company (GEICO), MAPFRE SA, American Family Insurance, Mitsui Sumitomo Insurance Group, Bajaj Finserv Limited, Verisk Analytics Inc., Liberty Mutual Group Inc., Root Insurance Company, The Zebra, Lemonade Inc., Berjaya Sompo Insurance Berhad, Arity LLC, Octo Telematics S.p.A, Insurethebox limited, Flock Limited, Mile Auto Inc.

What Are the Major Trends Shaping the Automotive Usage-Based Insurance Market?
Significant players in the automotive usage-based insurance sector are concentrating their efforts on creating innovative solutions, including usage-based insurance models. Such models facilitate tailored premiums, improved customer interaction, and risk evaluation. These insurance setups utilize data gathered via the car's telemetry system to monitor driving behaviors like velocity, distance, and regularity. This enables insurance providers to supply personalized premiums, promote secure driving, and perform more precise risk evaluations. For instance, Zuno General Insurance Limited, a company based in India, debuted its Pay How You Drive product in August 2024. This system rewards safe drivers and gives them more control over their insurance expenses. The plan personalizes car insurance premiums by tying them to individual driving habits, measured via a mobile app that generates a Zuno Driving Quotient. This inventive methodology provides discounts based on driving scores, encourages safe driving, enables customers to track their performance, and rewards them for enhanced driving practices.

What Are the Key Segments of the Automotive Usage-Based Insurance Market?
The automotive usage-based insurance market covered in this report is segmented -

1) By Type: Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), Manage-How-You-Drive (MHYD)
2) By Vehicle Type: Passenger Cars, Commercial Vehicles
3) By Technology: Black Box, On-Board Diagnostics (OBD)-II, Embedded, Smartphone, Other Technologies
4) By Distribution Channel: Insurance Companies, Aggregator Platforms
5) By End-User: Individual Consumers, Fleet Owners Or Managers

Subsegments:
1) By Pay-As-You-Drive (PAYD): Distance-Based PAYD Insurance, Time-Based PAYD Insurance, Geographical PAYD Insurance
2) By Pay-How-You-Drive (PHYD): Driving Behavior-Based PHYD Insurance, Speed And Acceleration-Based PHYD Insurance, Risk-Based PHYD Insurance (Harsh Braking, Cornering)
3) By Manage-How-You-Drive (MHYD): Telematics-Driven MHYD Insurance, Driver Coaching And Feedback-Based MHYD, Risk Reduction And Safety-Enhanced MHYD

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Which Region Dominates the Automotive Usage-Based Insurance Market?
North America was the largest region in the automotive usage based insurance market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the automotive usage-based insurance market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

What Is Covered In The Automotive Usage-Based Insurance Global Market Report?

- Market Size Analysis: Analyze the Automotive Usage-Based Insurance Market size by key regions, countries, product types, and applications.
- Market Segmentation Analysis: Identify various subsegments within the Automotive Usage-Based Insurance Market for effective categorization.
- Key Player Focus: Focus on key players to define their market value, share, and competitive landscape.
- Growth Trends Analysis: Examine individual growth trends and prospects in the Market.
- Market Contribution: Evaluate contributions of different segments to the overall Automotive Usage-Based Insurance Market growth.
- Growth Drivers: Detail key factors influencing market growth, including opportunities and drivers.
- Industry Challenges: Analyze challenges and risks affecting the Automotive Usage-Based Insurance Market.
- Competitive Developments: Analyze competitive developments, such as expansions, agreements, and new product launches in the market.

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