According to the research report titled ‘Usage-based Insurance Market Size By Package (Pay-How-You-Drive (PHYD), Pay-As-You-Drive (PAYD) [Device-based, Telematics-based]), By Technology (OBD-II, Smartphone, Blackbox, Embedded Telematics), By Vehicle Type (Passenger Vehicle, Commercial Vehicle), Industry Analysis Report, Regional Outlook, Growth Potential, Competitive Market Share & Forecast, 2019 – 2026’, available at MarketStudyReport.com, the global usage-based insurance (UBI) market is expected to cross USD 115 billion by the year 2026.
 

Rising adoption of usage-based insurance services in order to align insurance premiums with linked risks and track driving patterns is a major factor driving the market growth. UBI enables insurance companies to promote safe driving habits among the young population by providing rewards & incentives for adequate car maintenance and responsible driving. Increasing collaborations between insurance companies and technology solution providers in order to leverage advanced telematics solutions is aiding the expansion of the market.
 

Automobile manufacturers are integrating advanced in-vehicle communication and IoT systems which have enhanced real-time connectivity between insurance companies and vehicles helping them to remotely diagnose vehicle breakdown. 
 

As per package type, the report cites that PHYD (pay-how-you-drive) package segment held 70% share of usage-based insurance market in the year 2018 and is expected to register continuous growth during the forecast period. PHYD insurance focuses on current driving behavior as compared to traditional insurance models which used past driving records. Rising adoption of pay-how-you-drive insurance packages in order to reduce careless driving are stimulating the industry outlook.
 

On the other hand, PAYD (pay-as-you-drive) solutions segment is presumed to grow significantly during the estimated time frame. These solutions are used to gather information on road conditions, fuel efficiency, and driving behavior which helps in availing optimal insurance.
 

In terms of technology, the report states that smartphone segment is predicted to expand with a CAGR of 35% during the period of 2019-2026. Flourishing smartphone industry is a key factor fueling the growth of the segment. Users can measure their driving skills and make necessary modifications, to avoid high premiums, using the telematic solutions on smartphones.
 

Based on vehicle type, the passenger vehicle segment held 85% share in user-based insurance market in the year 2018. The growth is attributed to increasing sales of passenger vehicles across the globe. Moreover, growing demand for passenger vehicles equipped with telematics-based platforms in order to prevent unexpected failures and to monitor driving habits are contributing towards the growth of the market.
 

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As per regional analysis, Asia-Pacific user-based insurance market is presumed to expand with a CAGR of 26% between the year 2019 and 2026. Shifting focus towards telematic solutions by insurance providers coupled with rapid commercialization of UBI solutions in developing countries such as Vietnam, Thailand, and India are propelling the growth of the market in Asia-Pacific region.
 

Zubie Inc., Vodafone Automotive S.p.A., UnipolSai Assicurazioni S.p.A, TomTom International BV, State Farm Mutual Automobile Insurance Co., Sierra Wireless, Progessive Casualty Insurance Co., Octo Technology, Nationwide, Metromile Inc., Mapfre S.A., Liberty Mutual Insurance, Intelligent Mechatronic Systems Inc., Insure the Box Ltd., Desjardins Group, Danlaw Inc., Cambridge Mobile Telematics, AXA, Assicurazioni Generali S.p.A., Allstate Insurance Co., and Allianz SE are the prominent companies operating in the user-based insurance market.