DUBLIN--(BUSINESS WIRE)--The "Usage-Based Insurance Market for ICE & Electric Vehicle by Package (PAYD, PHYD, MHYD), Technology (OBD-II, Black box, Smartphone, Embedded), Vehicle Age (New, Old), Device Offering (BYOD, Company Provided) and Region - Global Forecast to 2026" report has been added to ResearchAndMarkets.com's offering.
The usage-based insurance market is projected to reach USD 66.8 billion by 2026 from an estimated USD 19.6 billion in 2021, at a CAGR of 27.7% during the forecast period.
The increasing adoption of telematics and advancements in safety technology have helped reduce claims. The European Union has mandated e-assistance systems in case of an accident. The eCall system, mandatory for all new EU vehicles since March 2018, speeds up emergency-response times by 40-50%. Also, Russia mandated a similar system for new cars at the end of 2017, while Mexico has mandated radio-frequency-identification (RFID) tags to bolster vehicle-antitheft systems. Many other countries, including China, Germany, Singapore, and South Africa, have voluntary systems that provide UBI incentives. However, the ambiguity over regulations and legislation and the lack of standardized systems can hinder market growth.
According to OICA, the sales of passenger car sales dropped from 63.7 million in 2019 to 53.6 million in 2020, witnessing a decline of 15.9% due to the pandemic. However, the decline in sales statistics did not impact the usage-based insurance market at all. For instance, according to Insurance Information Institute (III) and other secondary sources (insurancenewnet.com, blogs, articles, etc.), UBI got a boost during the COVID-19 pandemic. People were comfortable with having their insurance premiums based on the number of miles driven. Thus, in the coming years, the UBI market is likely to get a significant boost.
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.
Old Vehicle segment is expected to grow at the highest CAGR
The old vehicle segment 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 Pacific market is expected to register the highest growth during the forecast period
The Asia Pacific 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. Several companies plan to integrate telematics and IoT-enabled navigation in new vehicles to reduce carbon emissions 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
- Allstate Insurance Company
- Amica Mutual Insurance Company
- Assicurazioni Generali S.P.A.
- Cambridge Mobile Telematics
- Insure the Box Limited
- Liberty Mutual Insurance Company
- Metromile Inc.
- Modus Group, LLC
- Nationwide Mutual Insurance Company
- Octo Group S.P.A
- Progressive Casualty Insurance Company
- Sierra Wireless
- State Farm Mutual Automobile Insurance Company
- The Floow
- Trak Global Group
- Unipolsai Assicurazioni S.P.A
- Webfleet Solutions
- Zubie, Inc.
For more information about this report visit https://www.researchandmarkets.com/r/tkfdgk
Laura Wood, Senior Press Manager
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