DUBLIN--(BUSINESS WIRE)--The "Usage-Based Insurance Market for Automotive by Package Type, Technology Type (OBD-II, Blackbox, Smartphone, Embedded, and Other Technologies), Vehicle Type, Vehicle Age, Device Offering, Electric & Hybrid Vehicles, and Region - Global Forecast to 2027" report has been added to ResearchAndMarkets.com's offering.
The usage-based insurance market for automotive is projected to reach USD 126 billion by 2027 from USD 24 billion in 2019, at a CAGR of 23.0%.
Increasing adoption of telematics and connected cars is expected to drive the usage-based insurance market. According to Ernst & Young, 88 percent of all new cars in 2025 will feature embedded telematics. Intel research shows that connected cars are the third fastest growing technology market after phones and tablets. With the aid of technology found in today's smartphones such as accelerometer and gyroscope, the insurer can access all data to devise a clear picture of how a customer behaves. The easy operation and convenience of smartphone apps have provided a fillip to the usage-based insurance market.
PAYD segment is expected to be the largest market by package type
Pay-As-You-Drive (PAYD) is estimated to be the largest segment during the forecast period. The key advantages of PAYD are ease of deployment, no complex algorithms for working, and cost-effectiveness for the insurer as well as consumers. Secondly, PAYD insurance encourages consumers to drive less and drive green. This reduces vehicle emissions and contributes to the worldwide efforts for environmental betterment. As people drive less, the accidental risks associated with drivers reduce. Additionally, PHYD and MHYD gather multiple data points about driver behavior, which the driver may not be comfortable sharing. This makes PAYD the preferred choice. In addition, PHYD and MHYD record rash driving or speeding that attract higher premiums. Hence, many users stick to PAYD insurance plans.
On-Road Vehicle segment is expected to grow at the highest CAGR
On-road vehicle is estimated to be the fastest-growing market during the forecast period. Initially, the adoption of usage-based insurance is likely to be less in on-road vehicles. As the penetration of UBI is expected to increase in new vehicles, the UBI market for on-road vehicles will also increase at a rapid pace. The major countries that are expected high penetration of UBI are the US, Italy, Germany, UK, and China. The UBI penetration in vehicle parc is expected to increase with a double growth rate in these countries.
The Asia Oceania market is expected to register the highest growth during the forecast period
The Asia Oceania usage-based insurance market is estimated to be the fastest-growing regional market. The growing adoption of IoT and telematics in China, Japan, South Korea, and India is expected to drive market growth in the region. Rising pollution in APAC countries such as China is a major concern. Thus, the governments in this region are focusing on less CO2 emission as well as fuel-efficient solutions.
Several companies plan to integrate telematics and IoT enabled navigation in new vehicles to reduce carbon emission and offer real-time emission data. For instance, Maruti Suzuki launched Suzuki Connect, an advanced telematics solution for its customers in India. Similarly, the Ministry of Industry and Information Technology and the Standardization Administration of China together issued the Guidelines for Developing the Standards System of the Telematics Industry (Intelligent and Connected Vehicles). Such initiatives would boost the growth of vehicle telematics, which in turn would drive the growth of the usage-based insurance market during the forecast period.
- Increasing Adoption of Telematics and Connected Cars
- Reduction in Insurance Premium and Risk-Related Costs
- Ambiguity Over Regulations and Legislative Environments
- Developing Automotive Usage-Based Insurance Ecosystem
- Data Privacy
- Lack of Standardized Systems
- UnipolSai Assicurazioni S.P.A
- Progressive Casualty Insurance Company
- Allstate Insurance Company
- State Farm Mutual Automobile Insurance Company
- Liberty Mutual Insurance Company
- Assicurazioni Generali S.P.A.
- Webfleet Solutions
- Nationwide Mutual Insurance Company
- Zubie, Inc
- Cambridge Mobile Telematics
- Modus Group, LLC
- Metromile Inc.
- Sierra Wireless
- Octo Group S.P.A
- Trak Global Group
- Insure the Box Limited
- The Floow
For more information about this report, visit https://www.researchandmarkets.com/r/3a1ahw.