Future of the Usage-Based Insurance Market: Strategic Analysis and Forecast to 2034

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What Will the Usage-Based Insurance Industry Market Size Be by 2025?
Over recent years, the size of the usage-based insurance market has experienced significant expansion. The market is projected to increase from a value of $63.07 billion in 2024 to a value of $83.11 billion in 2025, with an impressive compound annual growth rate (CAGR) of 31.8%. This surge in the historic period is due to several factors such as the rise in vehicle ownership, vehicle thefts becoming more common, a strong demand for passenger car sales, and the wide-ranging acceptance of connected cars.

What's the Long-Term Growth Forecast for the Usage-Based Insurance Market Size Through 2029?
Anticipations are high for the usage-based insurance market size to undergo a significant expansion in the coming years, with a projected growth to reach $211.86 billion by 2029, expanding at a CAGR of 26.4%. Factors contributing to this growth during the projected period include a flourishing automobile industry, escalating demand for electric vehicles, increasing vehicular safety concerns, and an expedited adoption of usage-based insurance by insurance firms to enhance their profits. The forecast period also highlights several trends such as an emphasis on integrated technologies, smartphone technology-based telematics platforms, telematics technology, partnerships and collaborations, as well as self-installed telematics gadgets.

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What Are the Key Growth Drivers Fueling the Usage-Based Insurance Market Expansion?
The growth of the usage-based insurance market is anticipated to be driven by the expansion of the automotive industry in the future. This industry is characterized by a diverse range of businesses and organizations that play various roles, including the design, development, production, marketing and sale of vehicles. Vehicle owners are attracted to usage-based insurance powered by telematics because it offers lower premiums for safe driving and higher ones for risky driving. Consequently, by adjusting their driving behaviour, people can significantly reduce their insurance costs. For instance, data from the Organisation Internationale des Constructeurs d'Automobiles (OICA), an international association of car manufacturers based in France, shows noticeable growth in the global car industry in 2023. The production of vehicles hit 93546599 units, a sharp increase from the 85016728 units manufactured in 2022. Therefore, the rise in the auto industry fuels the expansion of the usage-based insurance market.

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What Are the Key Trends Driving Usage-Based Insurance Market Growth?
Firms within the usage-based insurance market are making substantial investments into connected technologies. This kind of technology allows devices and other systems to be linked via the internet. The businesses that operate in the usage-based insurance market are emphasizing connected technologies to deliver improved products and services to their clients. For example, By Miles, a startup for car insurance based in the UK, launched the By Miles Connect platform in April 2022. This platform enables drivers of connected cars to link their insurance policies directly to the firm from their cars. The platform uses the data about the miles driven obtained straight from the cloud system in the vehicles to determine the insurance cost.

How Is the Usage-Based Insurance Market Segmented?
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 Companies Are Leading the Charge in Usage-Based Insurance Market Innovation?
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

Which Regions Are Leading the Global Usage-Based Insurance Market in Revenue?
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.

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