Usage-Based Insurance Market Report 2026

The usage-based insurance market size has grown exponentially in recent years. It will grow from $82.7 billion in 2025 to $105.97 billion in 2026 at a compound annual growth rate (CAGR) of 28.1%. The growth in the historic period can be attributed to growth of connected vehicle technologies, increasing vehicle ownership rates, early adoption of pay-as-you-drive insurance, expansion of mobile insurance platforms, rising focus on driver safety monitoring.

The usage-based insurance market size is expected to see exponential growth in the next few years. It will grow to $243.32 billion in 2030 at a compound annual growth rate (CAGR) of 23.1%. The growth in the forecast period can be attributed to growing penetration of connected and electric vehicles, rising demand for personalized insurance products, expansion of ai-driven risk modeling, increasing adoption of smart mobility solutions, regulatory support for telematics-based insurance. Major trends in the forecast period include increasing adoption of telematics-based insurance models, rising use of real-time driving behavior analytics, growing deployment of smartphone-based ubi programs, expansion of personalized insurance pricing, enhanced focus on risk-based premium models.

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.

Leading companies in the Usage-Based Insurance (UBI) market are focusing on developing advanced solutions, such as telematics-driven premium adjustment systems, to enable personalized pricing and encourage safer driving behaviors. Telematics-driven premium adjustment systems collect data on driving behaviors, including speed, time of day, fatigue, mobile distraction, and road risk, to calculate insurance costs that reflect an individual’s driving habits. This approach helps drivers manage premiums while promoting safer driving patterns. For example, in September 2023, Definity Financial Corporation, a Canada-based property and casualty insurer, launched Sonnet Shift, featuring advanced telematics powered by The Floow and Munich Re Global Consulting. The platform uses individual driving behaviors and preferences as the primary factor for pricing, offering quarterly price adjustments based on recent driving scores. Safe drivers can save up to 35% on auto insurance, while lower mileage can yield up to 10% savings. The system provides personalized driving tips and 24/7 access to driving data through a mobile app, with projected discounts or surcharges updated weekly. Sonnet Shift also allows passengers to mark non-driving trips for accurate data capture and supports future expansion beyond Ontario.

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 are Progressive Corporation, Allstate Corporation, Allianz SE, AXA, Liberty Mutual Insurance, State Farm Mutual Automobile Insurance Company, American International Group Inc, Nationwide Mutual Insurance Company, UNIPOLSAI ASSICURAZIONI S.P.A, Mapfre S.A., Aviva Group, Metromile Inc, Amica Mutual Insurance Company, Intact Financial Corporation, CAA Insurance, The Co-operators Group Limited, Desjardins Insurance, Adamjee Insurance Company Limited, Santam, Hollard Group.

North America was the largest region in the usage-based insurance (UBI) market in 2025. The regions covered in the usage-based insurance market report are Asia-Pacific, South East Asia, 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, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

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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