Automotive Usage-Based Insurance Market Report 2025

This Automotive Usage-Based Insurance market report provides a comprehensive analysis of the market’s characteristics, size, and growth, including segmentation, regional and country-level breakdowns, competitive landscape, market shares, trends, and strategies. It also tracks historical and forecasted market growth across various geographies.

The automotive usage-based insurance market size has grown rapidly in recent years. It will grow from $48.9 billion in 2024 to $57.91 billion in 2025 at a compound annual growth rate (CAGR) of 18.4%. The growth in the historic period can be attributed to rising insurance premiums, the growth of connected vehicles, the need for improved risk assessment, regulatory changes favoring usage-based models, and the adoption of mobile apps.

The automotive usage-based insurance market size is expected to see rapid growth in the next few years. It will grow to $112.35 billion in 2029 at a compound annual growth rate (CAGR) of 18%. The growth in the forecast period can be attributed to advancements in AI and machine learning, enhanced data privacy and security measures, integration with smart home technology, growth in subscription-based insurance models, and rising environmental concerns. Major trends in the forecast period include integration of AI and machine learning for enhanced risk assessment, the rise of personalized and flexible insurance models, increasing adoption of telematics in electric vehicles, the incorporation of real time data from connected and autonomous vehicles, and growth in subscription-based.

The growth in vehicle ownership is anticipated to drive the expansion of the automotive usage-based insurance market. Vehicle ownership involves the possession and registration of motorized vehicles by individuals or entities, encompassing the rights and responsibilities related to the vehicle. This increase in vehicle ownership is attributed to economic growth, higher disposable incomes, urbanization, and a rising need for personal mobility. Automotive usage-based insurance (UBI) appeals to cost-conscious drivers by offering lower premiums to safe and low-mileage drivers, with personalized rates based on individual driving patterns. For example, in June 2024, Statistics Canada, a Canada-based government agency, reported that the total number of road motor vehicles registered in Canada reached 26.3 million in 2022, marking a 0.3% increase from 2021. Consequently, the rise in vehicle ownership is fueling the growth of the automotive usage-based insurance market.

Major players in the automotive usage-based insurance market are focusing on developing innovative solutions, such as usage-based insurance models, to offer personalized premiums, enhance customer engagement, and improve risk assessment. These models leverage data from a vehicle's telematics system to evaluate driving behaviors, including speed, distance, and frequency, enabling insurers to offer customized premiums. Safe driving is rewarded, and risk assessments are made more accurate. For example, in August 2024, Zuno General Insurance Limited, an India-based insurance company, introduced Pay How You Drive, which rewards safe driving and gives customers more control over their insurance expenses. This coverage personalizes car insurance premiums by linking them to individual driving behaviors, assessed through a mobile app that calculates a Zuno Driving Quotient. This approach not only offers discounts based on driving scores but also encourages safe driving practices, allowing customers to track their performance and earn rewards for improving their driving habits.

In July 2022, Lemonade Life Insurance Agency LLC, a US-based insurance company, acquired Metromile for $145 million. This acquisition is intended to enhance Lemonade's capabilities in the vehicle insurance sector by leveraging Metromile’s extensive data and technology. Lemonade aims to improve the precision and competitiveness of its auto insurance offerings by integrating Metromile’s advanced telematics and data analytics. Metromile, a US-based provider of automobile usage-based insurance, offers products such as pay-per-mile car insurance.

Major companies operating in the automotive usage-based insurance market are State Farm, MetLife Services and Solutions LLC, Nationwide Mutual Insurance Company, Allstate Insurance Company, Progressive Casualty Insurance Company, Chubb Limited, The Travelers Indemnity Company, Aviva plc, Government Employees Insurance Company (GEICO), MAPFRE SA, American Family Insurance, Mitsui Sumitomo Insurance Group, Bajaj Finserv Limited, Verisk Analytics Inc., Liberty Mutual Group Inc., Root Insurance Company, The Zebra, Lemonade Inc., Berjaya Sompo Insurance Berhad, Arity LLC, Octo Telematics S.p.A, Insurethebox limited, Flock Limited, Mile Auto Inc.

North America was the largest region in the automotive usage based insurance market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the automotive usage-based insurance market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the automotive usage-based insurance market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Automotive usage-based insurance (UBI) is a type of auto insurance where the premium is determined based on the actual usage of the vehicle. This insurance model utilizes telematics technology to monitor driving habits, mileage, and other relevant factors.

The main types of automotive usage-based insurance include pay-as-you-drive (PAYD), pay-how-you-drive (PHYD), and manage-how-you-drive (MHYD). Pay-as-you-drive (PAYD) is a form of usage-based insurance where the premium is calculated mainly based on the distance driven by the vehicle. This allows drivers to pay for insurance according to their vehicle usage. PAYD is applicable to various vehicle types, such as passenger cars and commercial vehicles, and employs different technologies, including black boxes, on-board diagnostics (OBD) II, embedded smartphones, and others. It is distributed through various channels, such as insurance companies and aggregator platforms, and serves different end-users, including individual consumers and fleet owners or managers.

The automotive usage-based insurance market research report is one of a series of new reports that provides automotive usage-based insurance market statistics, including automotive usage-based insurance industry global market size, regional shares, competitors with an automotive usage-based insurance market share, detailed automotive usage-based insurance market segments, market trends and opportunities, and any further data you may need to thrive in the automotive usage-based insurance industry. This automotive 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 automotive usage-based insurance market consists of revenues earned by entities by providing pay-when-you-drive (PWYD), pay-how-long-you-drive (PHLYD), pay-for-driving (PFD), and pay-for-risk (PFR). 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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