Increasing Electric Vehicle Demand Will Drive The Usage-Based Insurance Market Growth Rate To 25%
The Business Research Company's usage-based insurance market research report expands on key drivers, trends, and growth opportunities in the market.
LONDON, July 12, 2022 /PRNewswire/ -- The growing demand for electric vehicles will be a key driver of the usage-based insurance market. Electric vehicles are vehicles that operate with an electric motor instead of an internal combustion engine. Insurance companies are seeing massive opportunities in the electric vehicle market. According to McKinsey, a US-based management consulting firm, in 2030, the share of electrified vehicles is expected to range from 10% to 50% of new-vehicle sales. The increasing demand for electric vehicles will drive the automotive usage based insurance market.
The global usage based insurance market size is expected to grow from $43.31 billion in 2021 to $54.25 billion in 2022 at a compound annual growth rate (CAGR) of 25.3%. The global usage based insurance market share is then expected to grow to $132.02 billion in 2026 at a CAGR of 24.9%.
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Usage-Based Insurance Market Overview
The usage-based insurance (UBI) market consists of sales of usage-based insurance services by entities (organizations, sole traders, and partnerships) that provide auto insurance services by placing monitoring devices in the vehicle. UBI is frequently powered by telematics technology, which is accessible in vehicles via a plug-in device or is pre-installed in the car system, and that can also be accessed via mobile apps and delivers insurers with a variety of data, including how far a vehicle is driven, how it is driven, and where it is driven.
The global usage-based insurance market is segmented -
1) By Vehicle Type: Light-Duty Vehicle (LDV), Heavy-Duty Vehicle (HDV)
2) By Technology: OBD-II-Based UBI Programs, Smartphone-Based UBI Programs, Hybrid-Based UBI Programs, Black-Box-Based UBI Programs
3) By Package Type: Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), Manage-How-You-Drive (MHYD)
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Smartphone-Based Telematics – A Key Market Trend
Smartphone-based telematics platforms are gaining popularity among usage based insurance trends. Usage-based insurance market players are coming up with innovative smartphone technology-based telematics platforms to meet customers' needs. For instance, in September 2019, Zurich Insurance Company Ltd., a Switzerland-based insurance company, and Driveway Software, a US-based telematics company, launched a smartphone-based telematics platform to power mobile experiences with driving insights, connected services, and safety solutions. The platform allows Zurich's policyholders to save on their insurance premiums, and they may win prizes for demonstrating safe driving.
In 2021, Progressive Corporation Was The Leader In The Usage-Based Insurance Market
The Progressive Corporation was the largest competitor in the usage-based insurance market in 2021, with a 17.12% share of the market. The Progressive Corporation is an insurance holding company. It offers insurance products such as personal and commercial auto, residential and commercial property, general liability, and other products and related services. Progressive's growth strategy focuses on launching innovative programs to help small business owners. For instance, in December 2020, Progressive launched Snapshot ProView, a voluntary usage-based insurance and fleet management program for commercial auto customers. The fleet dashboards with near real-time geofencing notifications, trip-tracking, and vehicle location details help business owners manage their vehicles more efficiently.
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