In-Depth Analysis of the Usage-Based Insurance Market: Growth Opportunities, Key Trends, and Forecast 2025-2034

What industry-specific factors are fueling the growth of the usage-based insurance market?
The anticipated expansion of the automobile sector is predicted to boost the growth of the usage-based insurance market in future years. The car industry comprises a varied range of businesses and entities engaged in the design, development, manufacture, promotion and sale of vehicles. Owners of cars are attracted to telematics-powered usage-based insurance because it offers low premiums for safe driving, but high premiums for risky driving. Consequently, people can considerably decrease their insurance premiums by adjusting their driving behavior. For example, data from the Organisation Internationale des Constructeurs d'Automobiles (OICA), a French international association of car manufacturers, showed that the worldwide car industry in 2023 saw substantial growth, with total vehicle manufacturing reaching 93546599 units. This figure marked a substantial growth from the 85016728 units manufactured in 2022. Therefore, the expansion in the automobile sector contributes to the growth of the usage-based insurance market.

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What Is the projected market size and growth rate for the usage-based insurance market?
The market size of usage-based insurance has seen rapid expansion in the past few years. It is projected to escalate from $63.07 billion in 2024, to a sizeable $83.11 billion by 2025, with a compound annual growth rate (CAGR) standing at 31.8%. The historical period's growth is credited to factors such as increased vehicle ownership, rising incidents of vehicle theft, strong demand for passenger cars, and the widespread adoption of connected cars.

In the upcoming years, the usage-based insurance market is anticipated to experience considerable expansion, predicted to reach a market size of $211.86 billion by 2029, with a compound annual growth rate of 26.4%. The forecast growth is a result of several factors: the expansion of the automotive sector, the increasing demand for electric vehicles, growing safety concerns related to vehicles, and the increased use of usage-based insurance by insurance providers as a means to enhance profitability. Some significant trends expected during the projection period include a focus on connected technologies, an increased emphasis on smartphone-based telematics platforms, greater attention to telematics technology, a dedication to forming partnerships and collaborations, and an interest in self-installable telematics devices.

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What are the emerging trends shaping the future of the usage-based insurance market?
Firms within the usage-based insurance market are significantly directing their investments towards integrated technologies. These technologies, known as connected technologies, allow devices and systems to interact via the Internet. To enhance their product offerings and services, the firms in this market are emphasizing the adoption of these connected technologies. For example, By Miles, a car insurance startup in the UK, introduced their By Miles Connect platform in April 2022. This platform facilitates connected car drivers to directly link their insurance policies with the company from their vehicle. The miles driven data is automatically collected through a cloud platform set up in the cars to determine insurance costs.

What major market segments define the scope and growth of the usage-based insurance market?
The usage-based insurance market covered in this report is segmented -

1) By Vehicle Type: Light-Duty Vehicle (LDV), Heavy-Duty Vehicle (HDV)
2) By Technology: On-Board Diagnostic (OBD)-II-Based UBI Programs, Smartphone-Based UBI Programs, Black-Box-Based UBI Programs, Other Technologies
3) By Package Type: Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), Manage-How-You-Drive (MHYD)

Subsegments:
1) By Light-Duty Vehicle (LDV): Passenger Cars, SUVs, Light Trucks
2) By Heavy-Duty Vehicle (HDV): Buses, Heavy Trucks, Commercial Vehicles

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Which region dominates the usage-based insurance market?
North America was the largest region in the usage-based insurance (UBI) market in 2024. The regions covered in the usage-based insurance market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.

Which key market leaders are driving the usage-based insurance industry growth?
Major companies operating in the usage-based insurance market include Progressive Corporation, Allstate Corporation, UNIPOLSAI ASSICURAZIONI S.P.A, Allianz SE, Liberty Mutual Insurance, AXA, Mapfre S.A., State Farm Mutual Automobile Insurance Company, American International Group, Inc, Nationwide Mutual Insurance Company, Tata AIG, UbiCar, Takaful Islami Insurance Ltd, Pragati Insurance Company Limited, PingJia Technology, Insure The Box, Aviva Group, Octo Group S.p.A, Teltonika Telematics, ARCUS S.A, T-matic Systems S.A, Cefin Romania Systems, Cambridge Mobile Telematics, Zubie, Inc, Modus Group, LLC, Metromile Inc, Amica Mutual Insurance Company, Sierra Wireless, Intact Financial Corporation, TrueMotion, CAA insurance, The Co-operators Group Limited, Desjardins Insurance, EnVue Telematics, Aon Risk Services Argentina S.A, TTMS Argentina S.A, Lockton Brasil Corretora de Seguros Ltda, Uai Brazil Insurance Broker, ALC Corretora de Seguros, Marsh Brasil - EZ Towers, Abu Dhabi National Takaful Company, Oman Insurance Company, Wehbe Insurance Services LLC, Al Sagr National Insurance Company, Noor Takaful Insurance, Adamjee Insurance Company Limited, Old Mutual plc, Santam, MiWay Insurance, Hollard Group, Carrier Insurance Brokers, Glanvills Enthoven

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

• Market Size Forecast: Examine the usage-based insurance market size across key regions, countries, product categories, and applications.
• Segmentation Insights: Identify and classify subsegments within the usage-based insurance market for a structured understanding.
• Key Players Overview: Analyze major players in the usage-based insurance market, including their market value, share, and competitive positioning.
• Growth Trends Exploration: Assess individual growth patterns and future opportunities in the usage-based insurance market.
• Segment Contributions: Evaluate how different segments drive overall growth in the usage-based insurance market.
• Growth Factors: Highlight key drivers and opportunities influencing the expansion of the usage-based insurance market.
• Industry Challenges: Identify potential risks and obstacles affecting the usage-based insurance market.
• Competitive Landscape: Review strategic developments in the usage-based insurance market, including expansions, agreements, and new product launches.

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