The global usage-based insurance market is set to witness steady growth through 2032 owing to the shift in focus toward remote diagnostics systems.

The widespread use of embedded telematics and cellphones with built-in car connectivity systems give insurers a way to cut risk and provide policyholders with real-time service. The market players in the usage-based insurance sector are primarily concentrating on the implementation of cutting-edge technologies and insurance programs around the globe.

For instance, in August 2021, Unipol Group, under its direct insurance subsidiary Linear Assicurazioni, launched the first ever ’Try-Before-You-Buy’ system for Italian drivers, in collaboration with smartphone telematics supplier Cambridge Mobile Telematics (CMT).

The usage-based insurance industry has been divided in terms of package type, PAYD, technology, vehicle, and region.

On the basis of package, PAYD segment is anticipated to gain appreciable returns through 2032 given its umpteen benefits. The insurance focuses on monitoring the mileage driven and pricing policies based on that mileage.

Considering the PAYD spectrum, telematics- based insurance market is foreseen to account for notable gains between 2023-2032.

Based on technology, the black box segment is slated to grow at more than 16.5% CAGR from 2023 to 2032. In many nations, insurance regulators place a strong emphasis on installing black boxes in vehicles to provide UBI services. The Insurance Regulatory and Development Authority of India (IRDAI), for instance, has published a document describing the requirements and difficulties of implementing telematics-based insurance services in India.

Commercial vehicles are likely to depict significant demand for UBI technologies, impelling the global market dynamics. These technologies are used to increase the driving efficiency via real-time communications. Moreover, rising commercial vehicle production and sales would further supplement the segmental growth.

From the regional perspective, the Asia Pacific usage-based insurance industry is expected to expand at more than 27.5% CAGR from 2023 to 2032. The APAC region is projected to have a sizeable automobile usage-based insurance market share because of the improved robust telecommunications infrastructure as well as mobile communications technology. To help vehicle owners save money on their insurance premiums, the significant communication service providers in the area have teamed up with insurance providers to establish a UBI program.

The competitive landscape of the usage-based insurance industry is highly consolidated. The organizations present in the marketplace are AXA Equitable Life Insurance Company, ARGO Data Resource Corporation, Aviva plc, Allstate Insurance Company, and others.