New York City, NY, 26 February, 2020/ 24 Market Reports: It is estimated for the global usage-based insurance market to grow from USD 24.3 billion in 2019 and reach that of USD 125.4 billion by 2027, witnessing the growth at a CAGR of 23.3% during the forecast period of 2019 to 2027. Lower insurance premium compared to regular insurance, government regulations on telematics, high adoption of connected car services and growing on-road vehicles are the factors that are driving the growth of the market during the forecast period.
Asia Oceania and Europe are estimated to be the high growth market for usage-based insurance during the forecast period. The government regulations on telematics and increasing developments in connected car services and autonomous vehicles in countries such as China, Japan and Western European countries are the factors that are propelling the market in the Asia Oceania and European regions. Also, the R&D and collaborations among UBI companies in these regions are expected to drive the growth of the market during the forecast period.
Based on the vehicle type, it is estimated for the light-duty vehicle to be the largest vehicle for the global usage-based insurance market. Higher sales of LDVs vis-à-vis HDVs are the factors that are driving the growth of the segment during the forecast period. In the year 2018, the light commercial vehicles held the highest share in the market and the trend is estimated to continue throughout the forecast period. As the automotive industry continues to evolve with the introduction of next-generation technologies, the demand for LDVs equipped with advanced telematics-based platforms to monitor driving habits and prevent any sudden failures has increased.
During the forecast period, it is estimated for the embedded system segment to witness the growth at the highest CAGR in the market. As the embedded system is an integrated part of the vehicle and does not require external calibration to register data and thus is very accurate at capturing the vehicle data. The user does not have to buy a separate device to avail usage-based insurance as the system helps to reduce the initial cost. The market for embedded system-based UBI is thus directly related to the market for connected cars with inbuilt telematics.
Based on geography, the North America market is expected to be the largest market for usage-based insurance. The increasing adoption of Mobility as a service and increasing collaborations between telematics and insurance companies is driving the growth of the market in North America during the forecast period. Presence of major UBI companies in the region is also influencing the growth of the market.