Automotive Usage Based Insurance Market to Increase Gradually with a CAGR of 17.1% during the Forecast Period, Key Players Are Trying and Testing Numerous Strategies to Sell Users on the Value Proposition of UBI Programs

The global automotive usage based insurance market size is estimated to display strong growth by reaching USD 174.33 billion by 2030. Fortune Business Insights™ in its report titled “Automotive Usage Based Insurance Market Size, Share & COVID-19 Impact Analysis, By Type [Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), and Manage-How-You-Drive (MHYD)], By Solution (Dongle, Black Box, Embedded, and Smartphones), By Vehicle Type (Passenger Cars and Commercial Vehicles), and Regional Forecasts, 2023-2030” observes that the market size in 2022 stood at USD 50.35 billion and is expected to reach USD 57.86 billion in 2023. The market is expected to witness a strong CAGR of 17.1% during 2023-2030. An insurance company gathers information related to speed, acceleration rate, breaking pattern, and driving behavior to decide automotive usage based insurance premiums.

Bosch Signed an Agreement with Cariad for the Development of Partially and Highly Automated Driving within SAE Levels 3 and 4

In January 2022, Bosch signed an agreement with Cariad, Volkswagen subsidiary for the development of partially and highly automated driving within SAE levels 3 and 4. This cooperation will bring automated driving capabilities to all vehicle classes. The alliance is aimed to make the functions available to allow drivers to take their hands off the steering wheel temporarily. 

People Switched to Personalized UBI Policies, which Supported Market Growth

The COVID-19 impacted the driving habits in 2020 and the business of automotive usage based insurance manufacturers due to lockdown restrictions. This led to prevalence of work-from-home arrangements, closing of countless businesses, and average miles driven decreased significantly. However, with people wanting to reduce household costs, there has been a switch to personalized UBI policies.  

Number of Innovative Marketing Strategies to Positively Influence the Adoption of Insurance

Innovative strategies by the market players are predicted to drive the automotive usage based insurance market growth. With the aim to accelerate the industry, key players have been trying and testing numerous strategies to sell users on the value proposition of UBI programs. Hence, there is an increase in the number of innovative marketing strategies to positively influence the adoption of automotive usage based insurance policies.

However, data privacy & security is a major concern for consumers, which is expected to hinder market growth. Third-party data breach incidents may affect the market growth.

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MAPFRE Partnered with Cambridge Mobile Telematics to Launch MotionSmart

The key players are Allstate Insurance Company, AXA, State Farm Mutual Automobile Insurance Company, Liberty Mutual Insurance, Allianz, the Progressive Corporation, the Progressive Corporation MAPFRE, and Insurethebox. They have been implementing new and attractive programs, collaborating with vehicle manufacturers, and investing in promotional campaigns. In July 2021, MAPFRE partnered with Cambridge Mobile Telematics to launch MotionSmart (usage based insurance program).

Notable Industry Development

• May 2022: Liberty Mutual Insurance acquired the technology assets of Insurance Portal Services (Fetch). This acquisition helped Liberty insurance company in using embedded capabilities of insurance for the automotive industry.

List of Key Companies Profiled in the Report:

• Allstate Insurance Company (U.S.)
• State Farm Mutual Automobile Insurance Company (U.S.)
• Liberty Mutual Insurance (U.S.)
• AXA (France)
• The Progressive Corporation (U.S.)
• Allianz (Germany)
• American International Group, Inc. (AIG) (U.S.)
• MAPFRE (Spain)
• Insurethebox (U.K.)
• Verisk Analytics, Inc. (U.S.)
• Arity, LLC (U.S.)
• Insurance & Mobility Solutions (IMS) (Canada)

Further Report Findings

• The market in North America dominated the automotive usage based insurance market share with it being stood at USD 23.34 billion in 2022. The region witnesses increasing adoption of mobility-as-a-service and collaborations amongst OEMs and insurance and telematics companies.
• Asia Pacific is set to be the fastest growing region due to the presence of strong telecommunications infrastructure and mobile communications technology. Rapid expansion of the Internet of Vehicles network in countries, such as South Korea and China, is also assisting in the regional market growth. 
• Europe is also expected to show significant growth in the market due to substantial regulatory support regarding the adoption of vehicle telematics.
• Based on vehicle type, the segment is divided into passenger cars and commercial vehicles. Passenger cars segment dominated in 2022 due to availability of additional services such as remote vehicle control and theft protection at overall low cost. Commercial cars segment growth is characterized due to increasing adoption of insurance.

Table of Segmentation