Usage-Based Insurance for Automotive Market Size Worth USD 570.44 Billion by 2034 | CAGR: 22.6%

The global usage-based insurance for automotive market size is expected to reach USD 570.44 billion by 2034, according to a new study by Polaris Market Research. The report “Usage-Based Insurance for Automotive Market Size, Share, Trends, Industry Analysis Report: By Type, Technology, Vehicle (Passenger Auto and Commercial Auto), and Region (North America, Europe, Asia Pacific, Latin America, and Middle East & Africa) – Market Forecast, 2025–2034” gives a detailed insight into current market dynamics and provides analysis on future market growth.

Usage-based insurance (UBI) for automotive is a policy model where premiums are determined by the actual usage of the vehicle, often tracked through telematics devices that monitor factors such as driving behavior, distance, speed, and time of day. This innovative approach to insurance has gained traction due to its potential to offer tailored premiums based on individual driving patterns, making it more attractive to consumers who prioritize flexibility and cost-effectiveness.

The usage-based insurance for automotive market is experiencing robust growth, driven by the increasing adoption of telematics and connected car technology, which enables insurers to gather accurate data to assess risk and adjust premiums accordingly. This shift toward data-driven decision-making is also encouraged by regulatory frameworks aimed at improving road safety and reducing accidents, contributing to market expansion. Furthermore, the rising popularity of electric vehicles (EVs) and shared mobility services has created new opportunities for UBI models to thrive, as these segments require more flexible and dynamic insurance solutions.

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Usage-based insurance for automotive industry trends indicate a growing emphasis on driver safety, with insurers offering discounts for safe driving behaviors. Consumer awareness of UBI's potential benefits is growing as more drivers are opting for policies that provide incentives for safe and efficient driving. The increased focus on sustainability, along with demand for more personalized insurance experiences, is accelerating the UBI for automotive market expansion. Moreover, the evolving UBI market dynamics provide ample opportunities for insurers to explore innovative pricing models, creating potential for growth in both established and emerging markets.

Usage-Based Insurance for Automotive Market Report Highlights

• In terms of type, the pay-how-you-drive (PHYD) segment dominated the usage-based insurance for automotive market share in 2024 due to its ability to offer highly personalized premium structures based on real-time driving behavior.
• Based on vehicle, the passenger auto segment accounted for a larger market share in 2024 due to the rapid adoption of telematics-based insurance among private vehicle owners.
• In 2024, North America accounted for the largest market share due to the widespread adoption of telematics and strong regulatory support.
• The Europe usage-based insurance for automotive market is expected to witness substantial growth during the forecast period due to stringent emission regulations and increasing EV adoption.
• A few of the global key market players are Allianz; Allstate Insurance Company; American International Group, Inc.; Assicurazioni Generali S.p.A.; AXA; insurethebox; Liberty Mutual Insurance; MAPFRE; Progressive Casualty Insurance Company; and State Farm Mutual Automobile Insurance Company.

Polaris Market Research has segmented the usage-based insurance for automotive market report on the basis of type, technology, vehicle, and region:

By Type Outlook (Revenue – USD Billion, 2020–2034)

• Pay-As-You-Drive (PAYD)
• Pay-How-You-Drive (PHYD)
• Manage-How-You-Drive (MHYD)

By Technology Outlook (Revenue – USD Billion, 2020–2034)

• OBD II
• Black Box
• Smartphones
• Others

By Vehicle Outlook (Revenue – USD Billion, 2020–2034)

• Passenger Auto
• Commercial Auto

By Regional Outlook (Revenue – USD Billion, 2020–2034)

• North America
  • US
  • Canada
• Europe
  • Germany
  • France
  • UK
  • Italy
  • Spain
  • Netherlands
  • Russia
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • Malaysia
  • South Korea
  • Indonesia
  • Australia
  • Vietnam
  • Rest of Asia Pacific
• Middle East & Africa
  • Saudi Arabia
  • UAE
  • Israel
  • South Africa
  • Rest of Middle East & Africa
• Latin America
  • Mexico
  • Brazil
  • Argentina
  • Rest of Latin America

Usage-Based Insurance for Automotive Market Report Scope