Usage-Based Insurance Market Report 2025

The usage-based insurance market size has grown exponentially in recent years. It will grow from $63.07 billion in 2024 to $83.11 billion in 2025 at a compound annual growth rate (CAGR) of 31.8%. The growth in the historic period can be attributed to growth in vehicle ownership, increasing occurrences of vehicle theft, robust demand for passenger car sales, and high adoption of connected cars.

The usage-based insurance market size is expected to see exponential growth in the next few years. It will grow to $211.86 billion in 2029 at a compound annual growth rate (CAGR) of 26.4%. The growth in the forecast period can be attributed to the growing automotive industry, growing demand for electric vehicles, increasing concerns about vehicle safety, and a rapid use of usage-based insurance by insurance companies to improve profitability. Major trends in the forecast period include focusing on connected technologies, focusing on smartphone technology-based telematics platforms, focusing on telematics technology, focusing on partnerships and collaborations, and focusing on self-installed telematics devices.

The expansion of the automobile industry is expected to drive the growth of the usage-based insurance market in the coming years. The automotive industry encompasses a diverse range of businesses involved in the design, development, production, marketing, and sale of vehicles. Car owners are increasingly interested in telematics-driven usage-based insurance, as it offers lower premiums for safe driving and higher premiums for riskier behavior. This allows individuals to significantly reduce their insurance costs by improving their driving habits. For instance, in 2023, the Organisation Internationale des Constructeurs d'Automobiles (OICA), a France-based international association of automobile manufacturers, reported notable growth in the global automotive industry, with total vehicle production reaching 93,546,599 units, a significant increase from the 85,016,728 units produced in 2022. Consequently, the growth in the automobile industry is driving the expansion of the usage-based insurance market.

Increasing concerns about road traffic and vehicle safety are expected to drive the growth of the usage-based insurance market. This type of insurance relies on telematics technology to calculate premiums and provide suggestions and real-time alerts to drivers, enhancing safety. There has been heightened attention on passenger safety due to a rise in road accidents globally. For example, in August 2022, the National Highway Traffic Safety Administration (NHTSA), a US-based transportation agency, reported that 9,560 individuals were killed in road accidents in the first quarter of 2022, marking a 7% increase from 8,935 fatalities in 2021. These growing concerns about vehicle safety will likely increase demand for usage-based insurance, thereby driving market growth.

Companies in the usage-based insurance market are making substantial investments in connected technologies, which facilitate the connection of devices and systems via the internet. The focus on connected technologies is driven by the goal of providing enhanced products and services to customers. An illustrative example is the initiative by By Miles, a UK-based car insurance startup, in April 2022. By Miles launched the By Miles Connect platform, enabling connected car drivers to link their insurance policies directly from their vehicles. Utilizing the cloud platform installed in the vehicles, the platform gathers information about the distance driven to determine insurance pricing.

Partnerships and collaborations have become a prevalent trend among market players in the usage-based insurance sector. Companies are actively engaging in partnerships and collaborations to foster market growth and expand their consumer base. For instance, State Farm, a US-based insurance company, collaborated with Ford, a US-based automobile manufacturer, in February 2022 to launch the Drive Safe & Save program, a State Farm usage-based insurance initiative. This program allows customers to benefit from adjusted premiums based on vehicle mileage and driving behavior. State Farm customers with Ford or Lincoln vehicles can manage their overall vehicle ownership costs by reducing premiums through good driving behaviors or by improving their driving habits. Additionally, MSIG Thailand, an insurance company in Thailand, partnered with AIS Insurance Service, a Thailand-based digital technology company, in February 2021. Together, they launched Prakan Kubdee (Good Driving Insurance), a pay-as-you-drive insurance product in Thailand. This innovative product utilizes MSIG Car Informatics equipment, an IoT device developed by AIS, attached to the vehicle's onboard diagnostic port to calculate premiums based on real-time driving behavior. These partnerships exemplify the collaborative efforts within the usage-based insurance market to leverage technology for customer benefits and market expansion.

In October 2023, Allianz Partners, a US-based insurance company, partnered with Bolttech Management Limited to allow retailers and telecom providers to seamlessly integrate insurance products into customer experiences. This partnership aims to tackle the low penetration of non-life insurance in Asia and take advantage of the growing global market for extended warranties. Bolttech Management Limited is a US-based insurance company that specializes in offering usage-based insurance services.

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.

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. The countries covered in the usage-based insurance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Italy, Spain, Canada.

Usage-based insurance utilizes telematics technology often accessible in vehicles through plug-in devices or pre-installed systems, which can also be managed via mobile apps. This technology provides insurers with diverse data including distance traveled, driving behavior, and routes taken. It offers auto insurance services by employing monitoring devices within vehicles.

Vehicle types in usage-based insurance include light-duty vehicles (LDV) and heavy-duty vehicles (HDV). LDVs encompass passenger cars with a maximum gross vehicle weight of less than 8500 lbs. Various technologies such as OBD-II-based UBI programs, smartphone-based UBI programs, black-box-based UBI programs, and others are used in different packages such as pay-as-you-drive (PAYD), pay-how-you-drive (PHYD), and manage-how-you-drive (MHYD).

The usage-based insurance market research report is one of a series of new reports that provides usage-based insurance market statistics, including usage-based insurance industry global market size, regional shares, competitors with a usage-based insurance market share, detailed usage-based insurance market segments, market trends and opportunities, and any further data you may need to thrive in the usage-based insurance industry. This usage-based insurance market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The usage-based insurance market includes revenues earned by entities by driving-based and milage-based insurance. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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