Usage Based Insurance Market Size Worth USD 154.89 Billion By 2032 | CAGR: 20.8%

The global usage-based insurance market size is expected to reach USD 154.89 billion by 2032, according to a new study by Polaris Market Research. The report “Usage Based Insurance Market Share, Size, Trends, Industry Analysis Report, By Policy Type (Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), and Manage-How-You-Drive (MHYD)); By Technology; By Vehicle Age; By Vehicle Type; By Region; Segment Forecast, 2023- 2032” gives a detailed insight into current market dynamics and provides analysis on future market growth.

One of the main factors for the market expansion is the increasing adoption of usage based insurance due to its distinct advantages over traditional insurance. For instance, advantages such as personalized cost of insurance, decrease in fraudulent insurance claims, and real-time monitoring of the driving behavior are attracting a large group of people especially millennials and GenZ. Moreover, improvement in driving skills and the promotion of safer driving by these insurance systems are expected to fuel the market growth in the projected years.

Usage based insurance is being implemented by regulatory bodies in several countries owing to the promising benefits offered by this insurance system. Moreover, the growth of the automotive sector, coupled with the rising production and sales volume of vehicles, increases the demand for usage based insurance. For instance, according to the recent statistics published by the International Organization of Motor Vehicle Manufacturers, in 2022, the sales of new vehicles in India increased by 25.7% compared to 2021.

The growing government initiatives to promote usage based insurance coupled with the innovative marketing strategies undertaken by market players are propelling the market growth. Moreover, benefits, including the flexibility to add extra coverage to the policy and own damage and third-party liability coverage, are expected to fuel the market growth during the forecast period. The companies operating in this industry strongly concentrate on strategic initiatives such as collaborations and partnerships with automotive manufacturers in order to strengthen the demand for their usage based insurance policies. Such strategic developments will help in the growth of usage based insurance market in the upcoming years.

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Usage Based Insurance Market Report Highlights

• The Pay-As-You-Drive (PAYD) segment dominated the market, owing to the benefits such as maximum discounts and flexibility to enhance the existing policy by add-on.
• The smartphone segment is anticipated to register the highest CAGR, owing to the availability of inbuilt sensors required for usage based insurance.   
• The new vehicles segment is projected to witness significant growth, owing to increasing demand for personalized insurance from millennials and GenZ.
• The Light-Duty Vehicle (LDV) segment accounted for the largest market share, owing to the high adoption of usage based insurance among the young population.  
• North America accounted for the largest market share, owing to the growth in the sales of vehicles and regulatory support for this insurance system.
• The market players include Progressive Casualty Insurance Company, UNIPOLSAI ASSICURAZIONI S.P.A., Allstate Insurance Company, Liberty Mutual Insurance, and others.

Polaris Market Research has segmented the usage based insurance market report based on policy type, technology, vehicle age, vehicle type, and region:

Usage Based Insurance, Policy Type Outlook (Revenue - USD Billion, 2019 - 2032)

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

Usage Based Insurance, Technology Outlook (Revenue - USD Billion, 2019 - 2032)

• OBD (On-Board Diagnostics)-II
• Smartphone
• Embedded Telematics
• Others

Usage Based Insurance, Vehicle Age Outlook (Revenue - USD Billion, 2019 - 2032)

• New Vehicles
• Old Vehicles

Usage Based Insurance, Vehicle Type Outlook (Revenue - USD Billion, 2019 - 2032)

• Light-Duty Vehicle (LDV)
• Heavy-Duty Vehicle (HDV)

Usage Based Insurance, Regional Outlook (Revenue - USD Billion, 2019 - 2032)

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

Usage Based Insurance Market Report Scope