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Usage-Based Insurance Market to Cross 115 Bn US-Dollar by 2026 : Desjardins, Metromile, Nationwide, Allianz, Allstate, AXA, Cambridge Mobile Telematics, Danlaw, Inc.


Ocean View, DE -- (SBWIRE) -- 06/22/2020 -- Global usage-based insurance market is projected to witness heavy gains in the forecast timespan owing to the steady uptake of UBI platforms across the insurance sector. Through these platforms, insurance companies aim to align insurance premiums and accurately track driving patterns with estimated risks.

Increasing collaborations between solution providers and insurance companies would likely be a key factor pushing market growth. From these partnerships, insurance firms are focusing on using embedded telematics solution to grow their profitability.

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Citing an instance, in September 2017, Car Security started using CrashBox, a vehicle risk management platform and the telematics technology stack of CalAmp. The primary aim of the company behind move was to streamline the company's connected car offerings.

The Pay-How-You-Drive (PHYD) insurance package held a major market share of over 70% in 2018 and is expected to continue its dominance over the forecast timespan. This is attributed to the increasing popularity of PHYD among customers to reduce insurance premiums. Traditional insurance models were based on past driving history, whereas PHYD insurance focuses on present driving behavior to fix insurance premiums. Customers are leveraging this policy to reduce careless driving and are increasingly adopting safe driving practices to earn rewards & incentives. The PHYD policy is also beneficial to insurance providers as it reduces unanticipated fraudulent cases & accident risks and lowers insurance claims. The integration of other connected services, such as vehicle wellness reports and theft insurance programs, with PHYD packages, will further augment usage-based insurance market growth.

The usage-based insurance market in smartphone segment is anticipated to register the fastest growth with a CAGR of nearly 35% from 2019 to 2026 due to the rapid proliferation of smartphone devices and ease of use. Customers are reaping the benefits of telematics solutions installed on their smartphones to evaluate their driving style and make necessary modifications to reduce high premiums. Insurance companies are partnering with software solution providers to offer smartphone-based telematics insurance programs to remain competitive. In August 2018, the NJM Insurance Group selected IMS for its new smartphone-based insurance telematics program. NJM leverages IMS' smartphone telematics to promote safety among customers by applying driver scoring and offering rewards to safe drivers.

The passenger vehicles segment held a major market share of nearly 85% in 2018 due to the surging sales of new passenger vehicles. As the automotive landscape is continuously changing with the introduction of next-generation technologies, the demand for passenger cars equipped with advanced telematics-based platforms to monitor driving habits & prevent any sudden failures is increasing several-fold. According to the January 2017 report published by the European Commission, nearly 90% of the new car sales in 2020 will include embedded telematics packages. As multiple automotive manufacturers are partnering with technology providers to promote the adoption of connected cars, the passenger car segment is expected to benefit significantly.

Asia Pacific usage-based insurance market is set to witness a lucrative growth of over 26% CAGR from 2019 to 2026 due to the growing demand for telematics solutions in the region. The increasing focus of insurance providers on telematic technologies, especially in China and Japan, is driving the adoption of UBI policies across APAC. Commercialization of UBI technologies in the developing economies, such as India, Thailand, and Vietnam, will further proliferate market growth. The automotive manufacturers in the region are collaborating with insurance providers to develop customer-centric insurance products for their vehicles. For instance, in 2017, Toyota along with MS & AD Insurance Group's Aioi Nissay Dowa Insurance jointly introduced Japan's first driving behavior-based telematics automobile insurance. With the growing penetration of UBI solutions in the automobile industry to offer better fleet management, the APAC usage-based insurance market will drive the overall market growth.

Companies operating in the usage-based insurance market are focusing on various business growth strategies, including investments in new telematics solutions, strengthening partner networks, and geographical expansion. Through such strategic moves, companies are trying to gain a broader market share and maintain their leadership in the market. For instance, in October 2018, ThingCo, an insurance company, partnered with to offer telematics-based motor insurance to drivers in China. Furthermore, insurance companies are designing new insurance policies to meet customer requirements in collaboration with automakers & telematics solution providers. For instance, in September 2016, Generali and Progressive entered into a collaboration to research & develop customized car telematics solutions. The new solutions offered rewards to safer drivers and helped them improve their driving habits through personalized customer feedback.

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Some of the leading market players in the usage-based insurance market are AXA, Allstate, Sierra Wireless, State Farm, Allianz, Liberty Mutual, Nationwide, Desjardins Group, UnipolSai, Progressive, Generali, Octo, Metromile, Vodafone Automotive, Mapfre S.A, Zubie, TomTom, Insure The Box, IMS, Cambridge Mobile Telematics, Danlaw, etc.

Table of Contents (ToC) of the report:

Chapter 5. Usage-based Insurance Market, By Package
5.1. Key trends, by package
5.2. PHYD
5.2.1. PHYD market estimates and forecast, 2015-2026
5.3. PAYD
5.3.1. PAYD market estimates and forecast, 2015-2026
5.3.2. Device-based Device-based market estimates and forecast, 2015-2026
5.3.3. Telematics-based Telematics-based market estimates and forecast, 2015-2026

Chapter 6. Usage-based Insurance Market, By Technology
6.1. Key trends, by technology
6.2. OBD-II
6.2.1. OBD-II market estimates and forecast, 2015-2026
6.3. Smartphone
6.3.1. Smartphone market estimates and forecast, 2015-2026
6.4. Black Box
6.4.1. Black Box market estimates and forecast, 2015-2026
6.5. Embedded telematics
6.5.1. Embedded telematics market estimates and forecast, 2015-2026

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