Sales Revenue of Usage-based Insurance (UBI) Market to Substantially Increase During the Forecast Period Owing to Rapid Adoption Across Key Industries

Usage-based insurance (UBI) has been helping insurance companies to promote safe driving habits in young customers. The system is being widely explored to offer drivers rewards and incentives for adequate maintenance of cars and responsible driving, which will foster UBI industry size over the coming years.

There is an increase in the uptake of UBI platforms by various insurance companies so that they are able to track the driving patterns accurately and align the insurance premium with the estimated risks. The insurance companies are seen partnering with few solution providers to help increase the profitability of embedded telematics solutions.

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For example, Car Security had adopted CalAmp’s telematics technology stack as well as the CrashBox platform for vehicle risk management services in 2017. This was done to streamline the connected car offerings. According to the partnership, CalAmp is supposed to provide telematic tools for the optimization of the claim management process to the insurance companies.

Explored below are a few trends that will impact usage-based insurance market outlook in the next few years:

  • Increasing adoption of PHYD policies among consumers

Pay-How-You-Drive (PHYD) insurance models focus on the current driving behavior to be able to fix insurance premiums while the traditional insurance models were essentially based on past driving history. The policy model has highly been leveraged by the companies to discourage careless driving and has stimulated driving practices that are safe and provide incentives & rewards.

A PHYD policy helps reduce unexpected cases of fraud & accident risks and also lowers the insurance claims that make it beneficial for the insurance providers. PHYD insurance package segment had accounted for more than 70% of global UBI market share on account of the rising popularity of the model among customers for the reduction of insurance premiums.

Integration of various connected services like theft insurance and vehicle wellness programs along with PHYD packages shall support the growth of the market in the future and impact usage-based insurance trends.

  • Provision of smartphone-based insurance programs

Customers have been largely benefitting from the telematics solutions that are installed in their vehicles and connected to their smartphones to be able to evaluate their driving style as well as make necessary modifications for the reduction of high premiums. Insurance companies have begun collaborating with software solution providers to be able to provide telematics insurance programs based on smartphones to remain competitive.

The NJM Insurance Group had selected IMS for the new insurance telematics program based on smartphones in 2018. NJM utilizes smartphone telematics of IMS for the promotion of safety among the consumers by offering rewards to the safe drivers as well as applying driver scoring. The smartphone technology segment will observe a massive growth, registering more than 35% CAGR over 2019-2026 owing to the rapid adoption of the smartphone devices and its easy-to-use properties.

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  • Surging demand telematics driven UBI solutions

The automotive sector has been experiencing a major change with the constant introduction of next-generation technologies. There has been a significant demand for passenger cars equipped with advanced telematics-based platforms that could monitor the driving habits and later prevent sudden failures.

As per a report the European Commission had published in 2017, about 90% of the sales of new cars in 2020 shall include embedded telematics packages. The passenger car segment had held a majority of the share, accounting for about 85% of total UBI market size in 2018 owing to the accelerated sale of new passenger vehicles worldwide.

Auto makers and insurance companies have increasingly been focusing on the integration of in-vehicle communications systems and IoT due to the rapid change in the technological landscape within the industry. Onboard communication devices have been offering real-time connectivity between both the insurance companies and the vehicle to avail insurance. This helps them to distantly diagnose problems in vehicles.

Table of Contents of the Report (TOC):

Chapter 4   Competitive Landscape,

4.1    Introduction

4.2    Company market share, 2020

4.3    Competitive analysis of key market players, 2020

4.3.1    Allstate Insurance Company

4.3.2    Liberty Mutual Insurance

4.3.3    Nationwide Mutual Insurance Company

4.3.4    Progressive Corporation

4.3.5    State Farm Mutual Automobile Insurance Company

4.3.6    UnipolSai Assicurazioni S.p.A.

4.4    Competitive analysis innovative market players, 2020

4.4.1    Allianz SE

4.4.2    AXA

4.4.3    Insure The Box Limited

4.4.4    Metromile Inc.

4.5    Vendor adoption matrix, 2020

4.6    Top UBI players, by region

Chapter 5   Usage-based Insurance (UBI) Market, By Package

5.1    Key trends, by package

5.2    PHYD

5.2.1    PHYD market estimates and forecast, 2016- 2027

5.3    PAYD

5.3.1    PAYD market estimates and forecast, 2016- 2027

5.3.2    Device-based    Device-based market estimates and forecast, 2016- 2027

5.3.3    Telematics-based    Telematics-based market estimates and forecast, 2016- 2027

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