Worldwide usage-based insurance market is anticipated to exceed US $107 billion by the year 2024, according to the latest research available at Market Study Report LLC, report provides extensively data on market share, growth, trends and forecasts for the period 2018-2024.
Increasing employment of vehicle telematics to enhance driving behavior and align car insurance premiums with the existing vehicle condition via usage-based insurance has boosted the automotive insurance market revenue. It allows the detection of stolen cars through a GPS system connected to the vehicle and reduces the chances of accidents by monitoring the driver’s behavior, hence augmenting the UBI market growth.
According to the report, PHYD package segment is predicted to hold 66% market share over the forecast period. It calculates premiums based on an individual’s driving behavior, which helps insurers to charge premiums that are customized for individual drivers. In addition, various insurers also share this data with their clients to let them monitor their driving behavior.
Considering the technology spectrum, OBD-II segment dominated the UBI market with 50% share in 2017 and is predicted to continue this trend over the projected timespan. OBD dongles rooted with sensors are being utilized to detect accelerations and hard brakes, hence determining the fuel efficiency, road conditions, and driving patterns.
Based on vehicle type, UBI market from commercial automobiles segment is projected to grow at the rate of 18% over the forecast period, owing to the adoption of vehicular technologies and telematics to help the increase of commercial vehicle transportation market. Telematics data can be shared between companies and insurance institutions to decide discounts and premium rates for consumer based on their driving behavior.
Speaking of the regional landscape, North America will dominate the market with 38% share over the forecast timespan. Increasing incidents of vehicle theft in the region are predicted to drive the market growth. According to Insurance Information Institute, approximately 773,139 vehicles were stolen in the U.S. in 2017 compared to 767,290 in the year 2016. Enormous increase in connected cars market and growth in smartphones telematics for monitoring driver behavior will boost the regional market growth.
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The companies operating in the UBI market are introducing new products to cater to the needs of the passenger vehicle drivers and fleet managers. For instance, in October 2018, Autonet launched a UBI private car product for drivers using Vision Track’s video telematics solutions. This solution monitors the driving behavior and checks factors such as where the vehicle was driven and where it was kept overnight that can affect the insurance policy. Insurance companies are also entering into strategic partnerships with the telematics solution providers for developing new solutions. For instance, in March 2018, Octo Telematics partnered with RCI Bank and Services to provide its telematics services for vehicles worldwide. As a part of its sales process, RCI Bank offers its customers an option to use the Octo device in their cars to improve customer loyalty and relationship. Under this partnership, Octo also develops a complete profile of each driver to monitor the driving style and vehicle conditions. This allows the bank to offer tailored services based on each driver’s specific profile.