Automotive Usage-Based Insurance Market Report 2026

The automotive usage-based insurance market size has grown rapidly in recent years. It will grow from $57.69 billion in 2025 to $68.07 billion in 2026 at a compound annual growth rate (CAGR) of 18%. The growth in the historic period can be attributed to expansion of connected vehicle penetration, rising demand for fair and usage-based pricing models, increasing adoption of telematics devices, growth in data-driven insurance underwriting, higher consumer acceptance of digital insurance platforms.

The automotive usage-based insurance market size is expected to see rapid growth in the next few years. It will grow to $131.71 billion in 2030 at a compound annual growth rate (CAGR) of 17.9%. The growth in the forecast period can be attributed to increasing integration of ai-driven risk assessment, rising adoption among fleet operators, expansion of embedded insurance models, growing focus on real-time claims management, increasing regulatory support for usage-based insurance frameworks. Major trends in the forecast period include increasing adoption of telematics-based premium pricing, rising use of real-time driving behavior analytics, expansion of smartphone-based ubi models, growing integration of driver feedback and coaching tools, enhanced focus on personalized insurance products.

The rising level of vehicle ownership is expected to drive the growth of the automotive usage-based insurance market in the coming years. Vehicle ownership refers to the possession and registration of motorized vehicles by individuals or organizations, along with the associated rights and responsibilities. Growth in vehicle ownership is supported by factors such as economic expansion, increasing disposable incomes, urbanization, and a growing demand for personal mobility. Automotive usage-based insurance (UBI) appeals to cost-conscious drivers by offering personalized premiums based on driving behavior, rewarding safe and low-mileage users with lower insurance costs. For example, in January 2024, according to a report published by BMW Group, a Germany-based automotive manufacturer, the company achieved a record performance by delivering 2,555,341 BMW, MINI, and Rolls-Royce vehicles worldwide, representing a 6.5% increase compared to the previous year. Additionally, sales in the fourth quarter of 2023 rose by 10.3% year over year to 718,778 units. Therefore, the increase in vehicle ownership is contributing to the expansion of the automotive usage-based insurance market.

Major companies operating in the automotive usage-based insurance market are increasingly focused on developing innovative offerings, such as advanced usage-based insurance models, to deliver personalized premiums while improving customer engagement and risk assessment. These models rely on data gathered from vehicle telematics systems to evaluate driving behaviors, including speed, distance traveled, and driving frequency. This approach enables insurers to tailor premium pricing, reward safer driving habits, and achieve more precise risk evaluations. For instance, in August 2024, Zuno General Insurance Limited, an India-based insurance provider, introduced the Pay How You Drive program to encourage safe driving and give customers greater control over their insurance expenses. This product personalizes car insurance premiums by linking pricing to individual driving behavior measured through a mobile application that generates a Zuno Driving Quotient. The approach offers discounts based on driving scores while motivating responsible driving by allowing customers to track performance and earn rewards for improved habits.

In March 2023, Powerfleet Inc., a US-based technology company, acquired Movingdots for an undisclosed amount. Through this acquisition, Powerfleet sought to strengthen its presence in the insurance telematics and sustainable mobility segments by expanding its technological capabilities and delivering comprehensive connected vehicle solutions. Movingdots GmbH is a Germany-based technology firm specializing in insurance telematics, fleet analytics, and sustainable mobility solutions aimed at optimizing vehicle performance and improving risk management.

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 2025. 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, South East Asia, 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, Taiwan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

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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