What is the usage-based insurance market?

What is the usage-based insurance market?

2021-03-05

According to the latest report from Global Market Insights, the global usage-based insurance(UBI)market will grow from USD 24 billion in 2019 to USD 125.7 billion in 2027, with a compound annual growth rate of 23.0%.

The main influencing factors are as follows:

1. The insurance premium of UBI is more flexible than regular insurance.

2. Government regulations on telematics.

3. High adoption of connected car services.

4. Growing on-road vehicles.

5. COVID-19 epidemic has reduced people’s travel frequency and increased demand for insurance based on usage.

The North American/European market started early and UBI has a high penetration rate. It is currently the main and largest market for UBI. Compared with PHYD and MHYD, PAYD is more in line with market requirements and will become the largest market segment in the future. The growth of IoT technologies in the Asia-Pacific promotes the rapid growth of UBI and will become the fastest-growing market for UBI in the future.

UBI market of North American

The United States is the main market for UBI insurance in North America, with a penetration rate of 5%. Forecasts show that the North American UBI market is expected to account for more than 35% of the majority market share in 2024 and 70% of auto insurance service providers will use UBI in 2021.

UBI market of European

The European UBI insurance market is dominated by Blackbox (wired and wireless devices). At present, the utilization rate of UBI insurance is only 2%, and there is a huge market of 98% waiting to be developed. The promotion of the Internet of vehicles and the ECALL system will strongly promote the application of UBI in the European market. It is estimated that during 2019-2027, the compound annual growth rate of the European UBI market will reach 24.6% and reach 43.3 billion US dollars in 2027.

Italy: The first country to implement UBI in Europe, UBI accounted for 16% of the European car insurance market, high premium savings and cheap UBI equipment are the main reasons for its high penetration rate. Italy PHYD insurance accounts for 1/3 of the global PHYD market revenue.

United Kingdom: UBI accounts for 3% of the European car insurance market. Young people and new drivers are the main users. UBI can help young users reduce insurance premiums, also help insurance companies reduce costs, and increase revenue is the main reason for UBI’s growth in the UK.

Others: around 2% of the European car insurance market. Mainly affected by a conservative and rigorous attitude, the acceptance and recognition are low, and the market size is small. The local auto industry and insurance industry need to lead the change.

UBI market of ASAP

Japan: Japan is the most mature insurance market in Asia, and insurance companies are increasingly interested in UBI products. Most of them are mile-based auto insurance.

Australia: Some companies have begun to implement UBI

Latin America: a small number of UBI applications

After all, if you want to run a UBI business, JIMI UBI solutions will manage premiums in a more reasonable and equitable way, making your insurance product and service stand out from the competition.

Please feel free to contact us (info@jimilab.com) if you want to know more about JIMI UBI solutions.

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