Future of the Usage-Based Insurance Market: Trends, Innovations, and Key Forecasts Through 2034

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Usage-Based Insurance Market Size Growth Forecast: What to Expect by 2025?
The market for usage-based insurance has seen a meteoric rise in size in the past few years. It is projected to expand from a valuation of $63.07 billion in 2024 to an impressive $82.7 billion in 2025, representing a compound annual growth rate (CAGR) of 31.1%. This substantial growth during the historic period has been fueled by factors such as the surge in vehicle ownership, a rise in vehicle theft incidents, robust demand for the sale of passenger cars, and the widespread adoption of connected cars.

How Will the Usage-Based Insurance Market Size Evolve and Grow by 2029?
In the coming years, the usage-based insurance market is predicted to experience a rapid increase in size. Its projected growth rate is 25.7% CAGR, reaching $206.14 billion by 2029. This surge during the forecast period can be attributed to various factors such as the expansion of the automotive industry, an increased demand for electric vehicles, escalating concerns about vehicle safety, and the adoption of usage-based insurance by insurance firms to boost their profitability. The forecast period will also witness several trends, including an emphasis on connected and smartphone technology-based telematics platforms, telematics technology, partnerships, collaborations, and self-installed telematics devices.

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What Drivers Are Propelling the Growth of Usage-Based Insurance Market Forward?
The surge in the automobile sector is predicted to fuel the rise of the usage-based insurance market in future years. The automotive sector comprises a wide variety of businesses and organizations engaged in everything from automobile design and development to marketing and selling. Automobile owners are showing an increasing interest in telematics-driven usage-based insurance as it offers low premiums for low-risk driving and high premiums for high-risk driving. Therefore, altering their driving behaviors could significantly reduce their insurance premiums. For example, the international association of automobile manufacturers based in France, the Organisation Internationale des Constructeurs d'Automobiles (OICA), stated that in 2023, the global automotive industry demonstrated considerable growth, with the total number of vehicles produced amounting to 93546599 units, a marked upsurge from the 85016728 units produced in 2022. Consequently, the burgeoning growth in the automotive industry propels the expansion of the usage-based insurance market.

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What Are the Key Trends Driving Usage-Based Insurance Market Growth?
Firms in the usage-based insurance market are substantially investing in linked technologies. This technology has the ability to link gadgets and other systems through the Internet. To deliver enhanced products and services to their clients, companies in this insurance market sector are concentrating on these connected technologies. For example, By Miles, a British car insurance startup, initiated the By Miles Connect platform in April 2022. This platform enables drivers of connected cars to directly link their insurance policies to the company from their vehicle. The data on the miles driven is gathered directly through the cloud platform installed in the vehicles for insurance pricing.

What Are the Key Segments in the Usage-Based Insurance Market?
The usage-based insurancemarket 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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Who Are the Key Players Shaping the Usage-Based Insurance Market's Competitive Landscape?
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

What Geographic Markets Are Powering Growth in 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.

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