Automotive Usage Based Insurance Market Share & Size | 2027

Automotive Usage Based Insurance Market Forecast to 2027 - COVID-19 Impact and Global Analysis by Technology Fitted (Smartphones, Black Box, and Dongles); and Policy Type (Pay-As-You-Drive (PAYD) and Pay-How-You-Drive (PHYD)); and Geography

Publication Month : Aug 2020

  • Report Code : TIPAT100001345
  • Category : Automotive and Transportation
  • Status : Published
  • No. of Pages : 156
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The automotive usage based insurance market was valued at US$ 19.64 billion in 2019 and is expected to reach US$ 124.02 billion by 2027; it is estimated to grow at a CAGR of 26.0% during 2020–2027.

The matured markets in global automotive usage based insurance market accounted for the US, Italy and the UK, owing to which North America led the market followed by Europe. The dominance of North America in the global automotive usage based insurance market is attributed to the presence of large number of automotive OEMs, telematics companies, and insurance companies in the region. Additionally, rising adoption of newer technologies and solutions has pushed the residents to opt for telematics insurance. Moreover, the region is one of the precursors of mobility-as-a-service (MaaS) across the world, and the MaaS market has propelled extensively over the years in the region and is continually witnessing upward trends. Further, owing to a higher disposable income among the individuals, the pattern of procurement of new vehicles is rising in the region. With the rising number of vehicles, several associated technologies and solutions are also increasing rapidly in the US. These factors have positively impacted the growth of the usage based insurance market in the US.

Rise in the adoption of internet-connected devices and sensors is resulting in the obtainability of real-time information thus, giving insurers an opportunity to have an advantage over the competition. The data collected is further utilized to offer better underwriting, affordable prices, and loss control. Additionally, improvements in artificial intelligence techniques enable insurers to take decisions based on technology as a means of processing data. Further, implementation of blockchain technology can offer insurers with opportunities to provide new products, enhance fraud detection, and minimize administrative costs.

Impact of COVID-19 Pandemic on Automotive Usage Based InsuranceMarket

Due to the outbreak of COVID-19, the count of car trips has dropped drastically across the world. Therefore, the drivers and the vehicle owners are seeking for different criteria for making payment of insurance instead of making a flat rate, as the cars have been parked idle in the garages since last few months. Due to reduced trips of vehicles, the usage-based insurance is expected to be adopted highly. Thus, the companies are carefully monitoring the driving behavior because of restrictions imposed to curb the spread of COVID-19. To encourage safe driving in this pandemic situation, the need to measure the user's driving behavior is a must. This pandemic situation would assist in stimulating the use of telematics more in the auto insurance industry..

Lucrative Regional Automotive Usage Based Insurance Market

Lucrative Regional Automotive Usage Based Insurance Market
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Market Insights–Automotive Usage Based InsuranceMarket

The increasing traction of Mobility-as-a-Service (MaaS) among the consumers is leading the third party service providers to procure increased count of vehicles so as to enhance the customer experience. This factor is also increasing the number of service providers across the globe; some of the prominent mobility-as-a-service providers are Uber, Lyft, Zipcar, Car2go, Beeline Singapore, UbiGo AB, and Smile Mobility, among others.The increasing procurement of vehicles by these vehicle service providers is a crucial factor influencing the market for telematics technology providers (TTP), telematics service providers (TSP), and auto insurers across the globe. With the rise in MaaS in these geographies, there has been a remarkable rise in the number of young drivers, who indulge themselves in rash driving causing fatal accidents. With an objective to reduce vehicle accidents, several telematics providers and insurance companies are partnering with each other to introduce advanced, robust, and attractive insurance solutions, thereby, pacing up the telematics insurance or automotive usage based insurance market in the current scenario.

Technology Fitted-Based Insights–Automotive Usage Based InsuranceMarket

At present, the insurance providers are following either installation of hardware devices, where devices are equipped to the policyholders’ cars or the low-priced smartphone app route.Most of the insurance providers use on-board diagnostics systems or dongles. However, other providers offer smartphone apps that are easier to access and are economical.

Automotive Usage Based Insurance Market, by Technology Fitted– 2019 and 2027

Automotive Usage Based Insurance Market, by Technology Fitted– 2019 and 2027
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Policy Type-BasedInsights–Automotive Usage Based Insurance Market

Automotive usage based insurance utilizes actual driver data for calculating the premiums, which are more discrete and precise than traditional methods. This helps in potential savings to the customers. The two basic types of automotive UBI are pay-as-you-drive (PAYD) and pay-how-you-drive (PHYD). Each of these types are analyze slightly different information to determine premium rates for customers.

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Automotive Usage Based Insurance Market: Strategic Insights

automotive-usage-based-insurance-market
Market Size Value inUS$ 19.64 Billion in 2019
Market Size Value byUS$ 124.02 Billion by 2027
Growth rateCAGR of 26.0% from 2020-2027
Forecast Period2020-2027
Base Year2020
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The automotive usage based insurancemarket players focus on product innovations and developments by integrating advanced technologies and features in their products to compete with the competitors.

  • In 2020, Amerisure and Insurance & Mobility Solutions collaborated for a commercial fleet UBI telematics program in Michigan. The program will lead to create a powerful impact in reducing losses and keeping business owners encouraged to take part in the program and make changes in their fleets
  • In 2020, Liberty Mutual Insurance collaborated with Ford to provide driving discounts to the customers of Liberty Mutual who drives Ford connected vehicles. This will make it convenient for customers to save money on auto insurance and have safe driving

Automotive Usage Based Insurance Market – By Technology Fitted

  •      Smartphones
  •      Black Box
  •      Dongles
  •      Others

Automotive Usage Based Insurance Market – By Policy Type

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

Automotive Usage Based Insurance Market –Companies Profiles

  • Allstate Insurance Company
  • AXA SA
  • Allianz SE
  • Metromile, Inc.
  • Ingenie Services Limited
  • Liberty Mutual Insurance Company
  • Octo Telematics S.p.A
  • Sierra Wireless, Inc.
  • TomTom Telematics BV
  • Vodafone Automotive
Report Coverage
Report Coverage

Revenue forecast, Company Analysis, Industry landscape, Growth factors, and Trends

Segment Covered
Segment Covered

Technology Fitted ; and Policy Type and Pay-How-You-Drive ); and Geography

Regional Scope
Regional Scope

North America, Europe, Asia Pacific, Middle East & Africa, South & Central America

Country Scope
Country Scope

Australia, Brazil, Canada, China, Germany, Italy, Mexico, RoW, Singapore, South Africa, United Kingdom, United States

The List of companies - Automotive Usage Based Insurance Market

  1. Vodafone Automotive
  2. Liberty Mutual Insurance Company
  3. Allianz SE
  4. TomTom Telematics
  5. Allstate Insurance
  6. Octo Telematics
  7. Metromile
  8. Siera Wireless
  9. Ingenie Service Ltd.
  10. AXA SA

The Insight Partners performs research in 4 major stages: Data Collection & Secondary Research, Primary Research, Data Analysis and Data Triangulation & Final Review.

  1. Data Collection and Secondary Research:

As a market research and consulting firm operating from a decade, we have published many reports and advised several clients across the globe. First step for any study will start with an assessment of currently available data and insights from existing reports. Further, historical and current market information is collected from Investor Presentations, Annual Reports, SEC Filings, etc., and other information related to company’s performance and market positioning are gathered from Paid Databases (Factiva, Hoovers, and Reuters) and various other publications available in public domain.

Several associations trade associates, technical forums, institutes, societies and organizations are accessed to gain technical as well as market related insights through their publications such as research papers, blogs and press releases related to the studies are referred to get cues about the market. Further, white papers, journals, magazines, and other news articles published in the last 3 years are scrutinized and analyzed to understand the current market trends.

  1. Primary Research:

The primarily interview analysis comprise of data obtained from industry participants interview and answers to survey questions gathered by in-house primary team.

For primary research, interviews are conducted with industry experts/CEOs/Marketing Managers/Sales Managers/VPs/Subject Matter Experts from both demand and supply side to get a 360-degree view of the market. The primary team conducts several interviews based on the complexity of the markets to understand the various market trends and dynamics which makes research more credible and precise.

A typical research interview fulfils the following functions:

  • Provides first-hand information on the market size, market trends, growth trends, competitive landscape, and outlook
  • Validates and strengthens in-house secondary research findings
  • Develops the analysis team’s expertise and market understanding

Primary research involves email interactions and telephone interviews for each market, category, segment, and sub-segment across geographies. The participants who typically take part in such a process include, but are not limited to:

  • Industry participants: VPs, business development managers, market intelligence managers and national sales managers
  • Outside experts: Valuation experts, research analysts and key opinion leaders specializing in the electronics and semiconductor industry.

Below is the breakup of our primary respondents by company, designation, and region:

Research Methodology

Once we receive the confirmation from primary research sources or primary respondents, we finalize the base year market estimation and forecast the data as per the macroeconomic and microeconomic factors assessed during data collection.

  1. Data Analysis:

Once data is validated through both secondary as well as primary respondents, we finalize the market estimations by hypothesis formulation and factor analysis at regional and country level.

  • 3.1 Macro-Economic Factor Analysis:

We analyse macroeconomic indicators such the gross domestic product (GDP), increase in the demand for goods and services across industries, technological advancement, regional economic growth, governmental policies, the influence of COVID-19, PEST analysis, and other aspects. This analysis aids in setting benchmarks for various nations/regions and approximating market splits. Additionally, the general trend of the aforementioned components aid in determining the market's development possibilities.

  • 3.2 Country Level Data:

Various factors that are especially aligned to the country are taken into account to determine the market size for a certain area and country, including the presence of vendors, such as headquarters and offices, the country's GDP, demand patterns, and industry growth. To comprehend the market dynamics for the nation, a number of growth variables, inhibitors, application areas, and current market trends are researched. The aforementioned elements aid in determining the country's overall market's growth potential.

  • 3.3 Company Profile:

The “Table of Contents” is formulated by listing and analyzing more than 25 - 30 companies operating in the market ecosystem across geographies. However, we profile only 10 companies as a standard practice in our syndicate reports. These 10 companies comprise leading, emerging, and regional players. Nonetheless, our analysis is not restricted to the 10 listed companies, we also analyze other companies present in the market to develop a holistic view and understand the prevailing trends. The “Company Profiles” section in the report covers key facts, business description, products & services, financial information, SWOT analysis, and key developments. The financial information presented is extracted from the annual reports and official documents of the publicly listed companies. Upon collecting the information for the sections of respective companies, we verify them via various primary sources and then compile the data in respective company profiles. The company level information helps us in deriving the base number as well as in forecasting the market size.

  • 3.4 Developing Base Number:

Aggregation of sales statistics (2020-2022) and macro-economic factor, and other secondary and primary research insights are utilized to arrive at base number and related market shares for 2022. The data gaps are identified in this step and relevant market data is analyzed, collected from paid primary interviews or databases. On finalizing the base year market size, forecasts are developed on the basis of macro-economic, industry and market growth factors and company level analysis.

  1. Data Triangulation and Final Review:

The market findings and base year market size calculations are validated from supply as well as demand side. Demand side validations are based on macro-economic factor analysis and benchmarks for respective regions and countries. In case of supply side validations, revenues of major companies are estimated (in case not available) based on industry benchmark, approximate number of employees, product portfolio, and primary interviews revenues are gathered. Further revenue from target product/service segment is assessed to avoid overshooting of market statistics. In case of heavy deviations between supply and demand side values, all thes steps are repeated to achieve synchronization.

We follow an iterative model, wherein we share our research findings with Subject Matter Experts (SME’s) and Key Opinion Leaders (KOLs) until consensus view of the market is not formulated – this model negates any drastic deviation in the opinions of experts. Only validated and universally acceptable research findings are quoted in our reports.

We have important check points that we use to validate our research findings – which we call – data triangulation, where we validate the information, we generate from secondary sources with primary interviews and then we re-validate with our internal data bases and Subject matter experts. This comprehensive model enables us to deliver high quality, reliable data in shortest possible time.

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