The Global Usage-Based Insurance Market is Segmented by Package (Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), and Manage-How-You-Drive (MHYD)), Technology (OBD-II Dongle, Smartphone-Based, Black-Box/After-market Device, and Embedded Telematics (OEM)), Vehicle Type (Passenger Vehicles and Commercial Vehicles), and Geography (North America, South America, Europe, and More). The Market Forecasts are Provided in Value (USD).

According to Cognitive Market Research, the global Usage-Based Insurance market size will be USD 44680 million in 2025. It will expand at a compound annual growth rate (CAGR) of 22.40% from 2025 to 2033.

North America held the major market share for more than 40% of the global revenue with a market size of USD 16531.60 million in 2025 and will grow at a compound annual growth rate (CAGR) of 20.7% from 2025 to 2033.
Europe accounted for a market share of over 30% of the global revenue with a market size of USD 12957.20 million in 2025 and will grow at a compound annual growth rate (CAGR) of 21.3% from 2025 to 2033.
APAC held a market share of around 23% of the global revenue with a market size of USD 10723.20 million in 2025 and will grow at a compound annual growth rate (CAGR) of 25.5% from 2025 to 2033.
South America has a market share of more than 5% of the global revenue with a market size of USD 1697.84 million in 2025 and will grow at a compound annual growth rate (CAGR) of 23.2% from 2025 to 2033.
The Middle East had a market share of around 2% of the global revenue and was estimated at a market size of USD 1787.20 million in 2025. It will grow at a compound annual growth rate (CAGR) of 23.9% from 2025 to 2033.
Africa had a market share of around 1% of the global revenue and was estimated at a market size of USD 982.96 million in 2025 and will grow at a compound annual growth rate (CAGR) of 22.7% from 2025 to 2033
Pay As You Drive (PAYD) category is the fastest growing segment of the Usage-Based Insurance industry

Market Dynamics of Usage-Based Insurance Market

Key Drivers for Usage Based Insurance Market

Expanded Use of Mobile-Based Tracking and Telematics Devices Improves UBI's Capabilities to Boost Market Growth

The market for usage-based insurance, or UBI, is expanding significantly due to the increased use of mobile-based tracking and telematics devices. Insurers can now offer individualized premiums based on actual risk rather than conventional demographic considerations thanks to these technologies, which allow for real-time monitoring of driving behavior. Underwriting accuracy and claims processing efficiency are enhanced by the smooth data collection offered by mobile apps and embedded car telematics. UBI adoption is growing, especially among customers who are cost-conscious and safety-conscious, as smartphone penetration and IoT integration improve. Telematics is a major factor in the growth of the UBI market since it helps insurers with better risk assessment, fraud prevention, and customer engagement.

Accuracy and Efficiency are Increased Via AI-Driven Risk Assessment and IoT-Enabled Data Collection to Boost Market Growth

The Usage-Based Insurance (UBI) industry is expanding more quickly because of AI-driven risk assessment and IoT-enabled data collecting, which improve accuracy and efficiency. AI helps insurers to provide reasonable, behavior-based rates by analyzing driving trends, identifying dangerous habits, and forecasting the likelihood of accidents. Telematics and connected car sensors are examples of IoT devices that offer real-time information on position, speed, braking, and distance, guaranteeing accurate risk assessment. Customer experience is enhanced, fraud is decreased, and this technology streamlines claims processing. The growing use of AI and IoT gives insurers a better understanding of driver behavior, which boosts customer confidence in UBI models and allows for more competitive pricing and customized insurance.

Restraint Factor for the Usage-Based Insurance Market

Expensive Initial Implementation Charges Will Limit Market Growth

One major obstacle to the expansion of the Usage-Based Insurance (UBI) sector is the high initial implementation costs. To facilitate real-time tracking and risk assessment, insurers need to make significant investments in telematics infrastructure, IoT devices, data analytics platforms, and cybersecurity safeguards. Furthermore, significant financial and technological resources are needed to integrate UBI with legacy insurance systems. Additionally, telematics devices may be expensive upfront for consumers, which would deter adoption. Due to their financial difficulties, smaller insurers have less competition in the market. UBI adoption is slowed by the overall cost burden, even though mobile-based tracking lowers some costs. This is especially true in emerging nations where insurance companie...

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Automotive Usage-Based Insurance Market Size 2024-2028

The automotive usage-based insurance market size is expected to grow by USD 67.51 billion at a CAGR of 25.1% from 2023 to 2028. Market growth is driven by flexible pricing models offering personalized coverage, government regulations mandating motor vehicle insurance, and advancements in telematics and data analytics. These factors enable innovative UBI programs and foster an environment of innovation and advancement. Trends indicate a shift towards smartphone-based UBI and mobility-as-a-service, revolutionizing traditional insurance models. However, challenges such as data security issues and fraudulent claims persist, requiring continuous advancements in telematics and state regulations to ensure the integrity of the automotive insurance ecosystem. As insurers and OEMs develop new solutions, the industry adapts to evolving consumer needs and embraces technological advancements.

What will be the Size of the Automotive Usage-Based Insurance Market During the Forecast Period?

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Automotive Usage-Based Insurance Market Segmentation

The automotive usage-based insurance market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD Billion' for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments

Application Outlook 

  Embedded UBI
  App-based UBI





Pricing Scheme Outlook 

  PHYD
  PAYD
  MHYD

Region Outlook


  North America

    The U.S.
    Canada


  South America

    Chile
    Brazil
    Argentina 





  Europe

    U.K.
    Germany
    France
    Rest of Europe





  APAC

    China
    India





  Middle East & Africa

    Saudi Arabia
    South Africa
    Rest of the Middle East & Africa

The market is revolutionizing the insurance industry with its focus on telematic devices and connected cars. This innovative approach to insurance relies on on-road vehicles equipped with car telematics to track automotive usage and consumer driving behavior. Insurance companies leverage telematics data gathered from smartphones and black box devices to offer personalized insurance premiums based on factors like location tracking and fuel consumption. This shift from traditional insurance models to UBI and specialty insurance creates an automotive usage-based insurance ecosystem, enhancing data security and enabling vehicle recovery while addressing concerns such as fraudulent claims. With the integration of advanced technology and hybrid-based UBI, the market continues to expand, catering to both passenger cars and commercial vehicles in the mobility-as-a-service landscape.

By Application

The embedded UBI segment is estimated to witness significant growth during the forecast period. Embedded UBI solutions use external devices fitted into vehicles onboard diagnostics (OBD) to collect data about driving behavior. The data is transmitted to the insurer for optimum premium pricing. As the requirement of an external device posed a challenge for the adoption of embedded UBI and on-board diagnostics telematics, app-based UBI saw high adoption in the last 2-3 years.

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The embedded UBI was the largest segment and was valued at USD 10.10 billion in 2018. Additionally, governments around the world have established various committees to ensure safety during road transportation. Russia, Brazil, and many countries in Europe have mandated automotive telematics, such as emergency calls and stolen vehicle assistance, in vehicles. This trend will likely be followed by developing nations like India and China during the forecast period, thereby increasing the market share of embedded solutions. Additionally, it is expected that higher adoption of embedded solutions from luxury OEMs as they are ready to invest heavily in differentiating their products in the market. Therefore, the adoption of embedded UBI solutions in the automotive market will witness a continuous rise. This, in turn, is expected to drive automotive usage-based insurance market growth during the forecast period.

Key Regions

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Europe is estimated to contribute 34% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Europe dominates the automotive market. Factors such as pricing play an important role in the adoption of automotive UBI in this region. The largest distribution channel in Europe is through price comparison websites. These websites allow users to compare and choose among the various offerings provided by insurers. Additionall

This statistic shows the share of auto insurance companies forecast to use telematics usage-based insurance in the United States by 2020. Usage-based insurance is a type of insurance in which the costs are based on driving behaviors of policy holders. By 2020, it is forecast that ** percent of U.S. car insurers will be using telematics UBI.

The Usage-Based Insurance (UBI) market is experiencing robust growth, projected to reach $39.12 million in 2025 and expand at a Compound Annual Growth Rate (CAGR) of 11.34% from 2025 to 2033. This expansion is driven by several key factors. Increasing adoption of telematics technologies, particularly smartphone-based and OBD-II solutions, allows insurers to accurately assess individual driving behavior and offer personalized premiums. The rising prevalence of connected cars further fuels this trend, providing seamless data integration and facilitating the wider implementation of UBI programs. Consumer demand for fairer and more cost-effective insurance options, coupled with the growing awareness of the benefits of safer driving practices incentivized by UBI, contributes significantly to market growth. Furthermore, the increasing penetration of commercial vehicle telematics is expanding the UBI market beyond passenger vehicles. Regulatory support and technological advancements, such as the development of more sophisticated algorithms for risk assessment, are also contributing factors. Market segmentation reveals significant opportunities across various areas. The Pay-How-You-Drive (PHYD) model, offering premiums based on actual driving habits, is gaining traction, alongside the Pay-As-You-Drive (PAYD) model, which charges based on mileage. Technological advancements such as sophisticated embedded telematics systems are creating more accurate and comprehensive data collection, leading to more refined risk assessments. The passenger vehicle segment currently dominates, but the commercial vehicle segment presents considerable growth potential due to the increasing focus on fleet management and driver safety in this sector. Geographically, North America and Europe currently hold the largest market shares, but the Asia-Pacific region is anticipated to exhibit significant growth due to rising vehicle ownership and increasing technological adoption. Major players like Progressive, Allstate, and others are actively investing in UBI solutions, driving innovation and competition within the market. Recent developments include: In September 2023: Definity launched a new usage-based insurance (UBI) offering to provide drivers unprecedented control over their premiums while promoting safer driving practices., In August 2023: Citroen India, with the help of ICICI Lombard General Insurance, has introduced Usage-Based Insurance For EC3 Customers to encourage safe driving among owners.. Key drivers for this market are: Increasing Adoption of Telematics and Connected Cars. Potential restraints include: Increasing Adoption of Telematics and Connected Cars. Notable trends are: Rise in Smartphone Penetration is Fuelling the Market.

Usage-Based Insurance Platforms Market Outlook

According to our latest research, the global usage-based insurance platforms market size reached USD 39.6 billion in 2024, reflecting robust adoption across the insurance and automotive sectors. The market is poised to advance at a CAGR of 23.4% from 2025 to 2033, with the market size projected to reach USD 213.8 billion by 2033. This impressive growth trajectory is largely attributed to the increasing integration of telematics, data analytics, and connected car technologies, which are fundamentally reshaping risk assessment and pricing models in the insurance industry.

The surge in demand for personalized insurance solutions is a primary growth driver in the usage-based insurance platforms market. Traditional insurance models are increasingly being replaced by data-driven, customer-centric approaches that leverage real-time driving behavior and vehicle usage data. As consumers seek fairer and more transparent premium calculations, insurers are adopting usage-based insurance (UBI) platforms to offer flexible policies such as pay-as-you-drive and pay-how-you-drive. The proliferation of connected vehicles and advancements in IoT sensors have enabled insurers to collect granular data, resulting in more accurate risk profiling and improved customer satisfaction. This shift is further supported by evolving consumer preferences, where tech-savvy policyholders are more inclined to share driving data in exchange for potential cost savings and tailored coverage.

Another significant growth factor is the rising collaboration between automotive OEMs, insurers, and technology providers. Automotive manufacturers are increasingly embedding telematics devices and connectivity solutions directly into vehicles, facilitating seamless data exchange with insurance platforms. This collaboration allows for real-time monitoring of driving behavior, vehicle health, and location data, which not only enhances the accuracy of insurance underwriting but also enables value-added services such as proactive maintenance alerts and emergency assistance. The emergence of shared mobility and fleet management solutions has also accelerated the adoption of UBI platforms, particularly among commercial vehicle operators seeking to optimize insurance costs and operational efficiency. Furthermore, regulatory support and government initiatives promoting road safety and responsible driving behaviors are creating a conducive environment for market expansion.

Technological innovation is playing a pivotal role in shaping the future of the usage-based insurance platforms market. Artificial intelligence, machine learning, and big data analytics are being leveraged to extract actionable insights from vast volumes of telematics data, enabling insurers to design more sophisticated and dynamic insurance products. The integration of mobile applications and cloud-based platforms has made it easier for insurers to engage with customers, offer real-time feedback, and deliver usage-based policies at scale. Additionally, blockchain technology is being explored to enhance data security, transparency, and trust among stakeholders. These advancements are not only streamlining operational processes but also opening new avenues for product differentiation and customer engagement, thereby fueling market growth.

From a regional perspective, North America dominates the usage-based insurance platforms market, accounting for the largest revenue share in 2024, followed closely by Europe and the Asia Pacific. The presence of leading telematics providers, high vehicle connectivity penetration, and favorable regulatory frameworks have accelerated market adoption in these regions. Asia Pacific is expected to witness the fastest growth during the forecast period, driven by the rapid digital transformation of the automotive and insurance industries, increasing vehicle ownership, and growing awareness of telematics-based insurance solutions. Meanwhile, Latin America and the Middle East & Africa are gradually catching up, supported by rising investments in connected vehicle infrastructure and the growing need for cost-effective insurance products.

Component Analysis

The usage-based insurance platforms market is segmented by component into software and services, each playing a critical role in the ecosystem. Software solutions form the backbone of UBI platforms, encompassing telematics data management, analytics engines, custome

Usage-Based Auto Insurance Market Outlook

According to our latest research, the global usage-based auto insurance market size reached USD 40.2 billion in 2024, reflecting a robust adoption of telematics-driven insurance models. The market is projected to grow at a CAGR of 20.8% from 2025 to 2033, reaching a forecasted value of USD 260.6 billion by 2033. This exceptional growth is primarily driven by the increasing demand for personalized insurance premiums, advancements in telematics technology, and a heightened focus on road safety and cost efficiency by both insurers and policyholders.

One of the most significant growth factors in the usage-based auto insurance market is the rising consumer preference for fair and customized insurance pricing. Traditional auto insurance models often rely on static factors such as age, gender, and driving history, which can lead to generalized premium rates. In contrast, usage-based auto insurance leverages real-time data collection through telematics devices to assess driving behavior, distance traveled, and time of use. This enables insurers to offer premiums that more accurately reflect individual risk profiles, incentivizing safer driving habits and rewarding responsible drivers with lower costs. As consumers become increasingly aware of these benefits, the shift towards usage-based models is accelerating across global markets.

Another key driver is the rapid technological evolution in the telematics and connected vehicle ecosystem. The proliferation of smartphones, integration of advanced onboard diagnostics (OBD-II), and widespread adoption of embedded telematics systems have greatly facilitated the collection and analysis of driving data. These technologies not only enhance the accuracy of risk assessment but also enable insurers to offer value-added services such as real-time feedback, emergency assistance, and vehicle health monitoring. The integration of artificial intelligence and machine learning further refines underwriting processes, making usage-based insurance more attractive to both insurers and customers. The continuous innovation in telematics hardware and software is expected to further propel the growth of the usage-based auto insurance market in the coming years.

A third growth factor is the increasing regulatory support and industry collaboration aimed at promoting road safety and reducing accident rates. Regulatory bodies in regions such as North America and Europe are encouraging the adoption of telematics-based insurance by enacting favorable policies and standards. Additionally, partnerships between insurers, automakers, and technology providers are fostering the development of more sophisticated and user-friendly telematics solutions. These collaborative efforts are not only enhancing the value proposition of usage-based insurance but also expanding its reach to new customer segments, including commercial fleets and younger drivers. As regulatory frameworks continue to evolve, they are likely to create a more conducive environment for the widespread adoption of usage-based auto insurance.

Regionally, North America and Europe currently dominate the usage-based auto insurance market, accounting for the largest share of global revenues. These regions benefit from high vehicle telematics penetration, mature insurance markets, and proactive regulatory initiatives. However, the Asia Pacific region is emerging as a high-growth market, driven by rapid urbanization, increasing vehicle ownership, and rising awareness of telematics benefits. Latin America and the Middle East & Africa are also witnessing steady growth, albeit from a smaller base, as insurers in these regions begin to recognize the potential of usage-based models to improve profitability and customer satisfaction. This regional diversification is expected to contribute significantly to the overall expansion of the market over the forecast period.

Type Analysis

The type segment of the usage-based auto insurance market is primarily categorized into Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), and Manage-How-You-Drive (MHYD) models. Pay-As-You-Drive insurance bases premiums on the total distance driven, offering a straightforward approach that appeals to low-mileage drivers and those seeking cost savings through reduced usage. This model has gained significant traction in urban areas where public transportation options are abundant, allowing consumers to minimize their driving and in

Usage-Based Insurance Platform Market Outlook

According to our latest research, the global Usage-Based Insurance Platform Market size reached USD 44.2 billion in 2024, demonstrating robust expansion driven by the rapid digitization of the insurance sector and the proliferation of telematics-enabled vehicles. The market is projected to grow at a CAGR of 23.1% from 2025 to 2033, culminating in a forecasted market size of USD 326.8 billion by 2033. This remarkable growth is primarily fueled by the increasing adoption of connected vehicles, evolving customer expectations for personalized insurance products, and the insurance industryÂ’s shift towards data-driven underwriting and risk assessment models.

One of the most prominent growth factors in the Usage-Based Insurance Platform Market is the integration of advanced telematics and IoT solutions within the automotive sector. Insurers are leveraging real-time data on driving behavior, vehicle usage, and location to offer more accurate, customized insurance premiums. This data-centric approach not only enhances risk assessment but also incentivizes safer driving behavior, resulting in reduced claims and improved profitability for insurers. As connected vehicle technology becomes ubiquitous, insurance providers are increasingly compelled to invest in sophisticated platforms that can aggregate, process, and analyze vast streams of telematics data, thereby facilitating the growth of the usage-based insurance ecosystem.

Another significant driver is the changing consumer landscape, characterized by a growing demand for transparency, flexibility, and cost efficiency in insurance products. Modern customers, particularly millennials and Gen Z, are seeking usage-based insurance policies that align with their individual driving habits and lifestyle preferences. This shift is prompting insurers to move away from traditional one-size-fits-all policies towards dynamic, pay-as-you-drive, and pay-how-you-drive models. The proliferation of smartphones and mobile applications has further simplified the process for consumers to monitor their driving performance and manage their policies, thereby fostering greater engagement and adoption of usage-based insurance platforms.

Regulatory support and favorable government policies are also acting as catalysts for market growth. Many governments across North America, Europe, and Asia Pacific are encouraging the adoption of telematics and data-driven insurance models to enhance road safety and reduce accident rates. Regulatory frameworks that mandate the installation of telematics devices in commercial fleets or incentivize safe driving through insurance discounts are accelerating market penetration. Moreover, the increasing frequency of road accidents and the need for more accurate risk assessment are compelling insurers and regulators alike to embrace usage-based insurance platforms as a means to enhance overall road safety and reduce fraudulent claims.

From a regional perspective, North America currently dominates the Usage-Based Insurance Platform Market, accounting for the largest share in 2024, followed closely by Europe and Asia Pacific. The high penetration of connected vehicles, advanced telematics infrastructure, and a mature insurance industry are key factors underpinning North AmericaÂ’s leadership. Europe is witnessing rapid growth, driven by stringent regulatory mandates and heightened consumer awareness regarding personalized insurance offerings. Meanwhile, Asia Pacific is emerging as a lucrative market, buoyed by rising vehicle ownership, expanding digital infrastructure, and increasing adoption of telematics-based insurance, particularly in countries like China, Japan, and India.

The evolution of Telematics Data Platforms for Insurance is reshaping the landscape of the insurance industry. These platforms are pivotal in harnessing the power of telematics data to offer insurers a comprehensive view of driving behaviors and vehicle usage patterns. By integrating advanced data analytics and machine learning algorithms, insurers can refine their risk assessment models and develop more personalized insurance products. This technological advancement not only enhances the accuracy of underwriting processes but also enables insurers to offer dynamic pricing models that reflect real-time driving conditions. As

Usage-Based Commercial Auto Insurance Market Outlook

According to our latest research, the global usage-based commercial auto insurance market size reached USD 17.4 billion in 2024, driven by the increasing adoption of telematics and data-driven insurance solutions. The market is witnessing a robust growth trajectory, registering a CAGR of 19.2% during the forecast period. By 2033, the market is expected to reach USD 74.6 billion, reflecting a significant transformation in the commercial auto insurance landscape. This rapid expansion is primarily attributed to advancements in connected vehicle technologies, the proliferation of fleet management solutions, and the growing demand for personalized insurance offerings tailored to driving behavior and usage patterns.

One of the principal growth factors propelling the usage-based commercial auto insurance market is the increasing integration of telematics and IoT devices in commercial vehicles. Fleet operators and individual policyholders are increasingly seeking insurance models that accurately reflect their risk profiles and driving behaviors. Telematics-based insurance leverages real-time data, such as distance traveled, driving speed, braking patterns, and time of use, to tailor premiums according to actual usage. This not only incentivizes safer driving but also enables insurers to offer more competitive and flexible pricing. The integration of these technologies has significantly reduced claim costs and fraud, allowing insurers to optimize their risk management practices and deliver enhanced value to customers.

Another key driver is the growing regulatory support and government initiatives aimed at improving road safety and encouraging the adoption of connected vehicle solutions. Many countries have introduced mandates and incentives to promote telematics adoption in commercial fleets, which has, in turn, fueled demand for usage-based insurance products. Additionally, the rise of e-commerce and logistics industries has led to an exponential increase in the number of commercial vehicles on the road, further intensifying the need for dynamic and usage-oriented insurance models. Fleet operators are increasingly recognizing the benefits of usage-based insurance in terms of cost savings, operational efficiency, and risk mitigation, which has accelerated market growth across various regions.

The digital transformation of the insurance industry is also playing a pivotal role in the expansion of the usage-based commercial auto insurance market. Insurers are leveraging big data analytics, artificial intelligence, and cloud computing to process vast amounts of telematics data and generate actionable insights. This technological evolution has enabled the development of sophisticated risk assessment models, real-time policy adjustments, and enhanced customer engagement. The proliferation of smartphone-based telematics solutions has also democratized access to usage-based insurance, making it accessible to both large fleet operators and individual commercial vehicle owners. As digital adoption continues to rise, the market is expected to witness sustained growth, with insurers and technology providers collaborating to deliver innovative and personalized insurance solutions.

From a regional perspective, North America currently dominates the usage-based commercial auto insurance market, accounting for the largest market share in 2024. This leadership is attributed to the early adoption of telematics, advanced regulatory frameworks, and a high concentration of commercial fleets. Europe follows closely, driven by stringent road safety regulations and the widespread implementation of connected vehicle technologies. The Asia Pacific region is emerging as a high-growth market, supported by rapid urbanization, expanding logistics sectors, and increasing investments in smart transportation infrastructure. Latin America and the Middle East & Africa are also witnessing gradual adoption, albeit at a slower pace, due to infrastructural constraints and varying regulatory environments.

Type Analysis

The type segment in the usage-based commercial auto insurance market is primarily categorized into Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), and Manage-How-You-Drive (MHYD). Pay-As-You-Drive insurance models are gaining significant traction among commercial vehicle operators seeking cost-effective insurance premiums based on actual distan

Automotive UBI (Usage-based Insurance) Market size was valued at USD 2.4 Billion in 2023 and is projected to reach USD 10.6 Billion by 2030, growing at a CAGR of 15.1% during the forecast period 2024-2030.

Global Automotive UBI (Usage-based Insurance) Market Drivers

The market drivers for the Automotive UBI (Usage-based Insurance) Market can be influenced by various factors. These may include:

Technological Developments in Telematics: Advanced telematics technology integrated into cars makes it possible to monitor driving behavior in real time. This covers variables including velocity, distance covered, braking technique, and more. This data can be used by insurers to more precisely evaluate risk. Reduced Expenses for Policyholders: With UBI, policyholders can adjust their rates according to their real driving patterns, which could result in financial savings for careful drivers. Customers find this customized pricing model appealing, which encourages the uptake of UBI initiatives. Evaluation and Control of Risks: Insurance companies can use real-time data on driving behavior to more effectively evaluate and manage risks. By doing so, they are able to customize insurance rates for each motorist, promoting safe driving practices and reducing the dangers associated with high-risk activities. Regulatory Assistance: In certain areas, regulatory agencies might be in favor of or push for the implementation of UBI as a way to boost traffic safety and promote defensive driving. Encouraging regulations can stimulate market expansion by fostering an atmosphere that is favorable to the implementation of UBI. Boosting Vehicle Connectivity: The increasing number of vehicles that are networked and have sensors and communication capabilities offers a lot of data that can be used for UBI. One of the main forces behind the growth of UBI programs is the growing connectedness of automobiles. Customer Knowledge and Gratitude: UBI is a paradigm that is becoming more and more popular as people become more conscious of it and its possible advantages. Insurers' marketing and education initiatives can be quite effective in raising consumer awareness and promoting market expansion. Competitive Environment: The adoption of UBI may be influenced by the competitive environment among insurance providers, as businesses want to set themselves apart by providing unique and customized insurance products. The rivalry may result in a wider acceptance of UBI. Intelligent Data and Machine Learning: Insurance companies can now effectively handle massive amounts of telemetry data thanks to developments in artificial intelligence and data analytics. This improves their capacity to derive significant insights and precisely evaluate risk, which helps UBI expand.

The global automotive usage-based insurance (UBI) market was forecast to grow to ****** billion U.S. dollars by 2027, up from ***** billion U.S. dollars in 2018. UBI is also known as pay as you drive (PAYD) and pay how you drive (PHYD), as it the practice of collecting driving data from a vehicle to calculate the auto premium of the respective driver.

The Usage-Based Insurance (UBI) market has significantly transformed the insurance industry by leveraging data analytics and telematics to create personalized coverage options. UBI operates on the premise that insurance premiums can vary based on an individual's driving behavior, encompassing factors such as speed,

Usage-Based Insurance (UBI) Market Outlook

As per our latest research, the global Usage-Based Insurance (UBI) market size reached USD 47.2 billion in 2024, reflecting a robust expansion driven by the increasing adoption of telematics and data analytics in the insurance sector. The market is experiencing a compound annual growth rate (CAGR) of 22.3% through the forecast period. By 2033, the UBI market size is projected to reach USD 355.1 billion, underscoring the transformative impact of connected technologies and personalized insurance offerings. This remarkable growth is fueled by rising consumer demand for flexible insurance premiums, advancements in vehicle connectivity, and the growing prevalence of telematics-enabled vehicles worldwide.

One of the primary growth factors propelling the Usage-Based Insurance (UBI) market is the increasing penetration of telematics devices and connected car technologies. The proliferation of Internet of Things (IoT) solutions, coupled with the widespread adoption of smartphones and in-vehicle communication systems, has enabled insurers to collect real-time driving data with unprecedented accuracy. This access to granular behavioral data allows insurance providers to offer personalized premium rates, rewarding safe driving habits and reducing risk exposure. Additionally, regulatory support in several countries has encouraged the deployment of telematics-based insurance, further accelerating market growth. The convergence of automotive digitization and insurance innovation is fundamentally reshaping the motor insurance landscape, making UBI an attractive proposition for both insurers and policyholders.

Another significant driver of the UBI market is the growing consumer demand for cost-effective and transparent insurance products. Traditional insurance models often fail to account for individual driving patterns, leading to a disconnect between premiums and actual risk. Usage-Based Insurance addresses this gap by offering pay-as-you-drive and pay-how-you-drive solutions, aligning premiums more closely with real-world usage and behavior. This shift towards user-centric insurance models is particularly appealing to younger, tech-savvy consumers who value customization and digital engagement. The ability to monitor driving behavior not only incentivizes safer driving but also fosters greater trust and engagement between insurers and policyholders. As digital transformation continues to permeate the insurance sector, UBI is poised to become the new standard for motor insurance.

The rapid expansion of vehicle fleets in commercial and logistics sectors is also contributing to the growth of the UBI market. Fleet operators are increasingly adopting telematics-based insurance to optimize fleet management, reduce operational costs, and enhance driver safety. UBI solutions enable real-time monitoring of fleet performance, route optimization, and proactive risk management, resulting in lower claims frequency and improved profitability. The integration of advanced analytics and artificial intelligence further enhances the predictive capabilities of UBI platforms, enabling insurers to offer tailored products for both individual and fleet customers. As businesses seek to leverage data-driven insights for competitive advantage, the demand for UBI solutions in the commercial segment is expected to surge in the coming years.

The role of Usage-Based Insurance Telematics Devices is pivotal in the evolution of the UBI market. These devices, which include OBD-II, smartphones, and embedded systems, are instrumental in capturing real-time data on driving behavior and vehicle performance. By leveraging these telematics devices, insurers can offer more accurate and dynamic premium pricing, aligning costs with actual usage and driving habits. This technological advancement not only enhances the precision of risk assessment but also fosters a more transparent and trust-based relationship between insurers and policyholders. As the adoption of telematics devices continues to grow, they are expected to play a crucial role in shaping the future of personalized insurance offerings.

From a regional perspective, North America currently dominates the global Usage-Based Insurance market, accounting for the largest share in 2024. This leadership is attributed to the high penetration of connected vehicles, strong presence

The North America Usage-based insurance Market would witness market growth of 24.6% CAGR during the forecast period (2023-2030). This insurance is called telematics insurance, known for the insurance policy that analyses the premium based on vehicle usage or consumer driving behavior. User-based i

The Usage-Based Insurance (UBI) market is rapidly evolving as a transformative force in the insurance industry, leveraging technology to redefine how insurers assess risk and price policies. By utilizing telematics and connected devices, UBI allows insurers to monitor driving behavior in real time, enabling personal

Discover the booming automotive usage-based insurance (UBI) market. This in-depth analysis reveals key trends, growth drivers, and challenges, including regional market share, leading companies (Allianz, AXA, Progressive, etc.), and the impact of telematics. Explore the future of UBI and its potential for personalized insurance.

Usage Based Insurance Market size was valued at USD 39.97 Billion in 2024 and is projected to reach USD 239.95 Billion by 2032, growing at a CAGR of 27.70% from 2026 to 2032.Usage Based Insurance Market DriversGrowing Adoption of Telematics: The burgeoning integration of telematics devices and advanced Internet of Things (IoT) solutions within the automotive ecosystem stands as a pivotal driver for the Usage Based Insurance (UBI) market. As vehicles become increasingly digitized, from embedded manufacturer systems to aftermarket plug-and-play devices and even smartphone applications, the capability for insurers to collect precise, real-time driving data expands exponentially.Rising Focus on Personalized Premiums: A significant shift in consumer expectation towards personalized services is profoundly impacting the insurance landscape, with a strong emphasis on individualized premiums driving the UBI market forward. Modern consumers, particularly those who perceive themselves as safe drivers, are increasingly unwilling to subsidize higher-risk policyholders through traditional, generalized premium structures.

Connected Usage-Based Insurance Market Outlook

According to our latest research, the Global Connected Usage-Based Insurance (UBI) market size was valued at $38.4 billion in 2024 and is projected to reach $153.7 billion by 2033, expanding at a robust CAGR of 16.7% during the forecast period of 2025–2033. The rapid growth of this market is primarily driven by the proliferation of connected vehicles and advancements in telematics technology, which enable insurers to collect real-time driving data and offer personalized insurance premiums. This shift towards data-driven, customer-centric insurance models is transforming the automotive insurance landscape, enhancing risk assessment accuracy, and incentivizing safer driving behaviors globally.

Regional Outlook

North America currently holds the largest share of the global Connected Usage-Based Insurance market, accounting for approximately 38% of the total market value in 2024. This dominance is attributed to the region’s mature automotive and insurance industries, widespread adoption of telematics, and favorable regulatory frameworks that encourage innovation in insurance offerings. The United States, in particular, has witnessed significant penetration of UBI programs, with both established insurers and new entrants leveraging advanced analytics and IoT-enabled devices. The presence of leading telematics technology providers and strong consumer awareness further bolster North America's position as a frontrunner in the global Connected Usage-Based Insurance market.

The Asia Pacific region is emerging as the fastest-growing market for Connected Usage-Based Insurance, with an anticipated CAGR of 21.3% between 2025 and 2033. This accelerated growth is fueled by increasing vehicle ownership, rapid urbanization, and rising demand for cost-effective insurance solutions in countries like China, India, and Japan. Governments across the region are also implementing policies to promote road safety and telematics adoption, while insurers are investing heavily in digital transformation initiatives. The influx of connected and electric vehicles, coupled with growing consumer acceptance of pay-as-you-drive and pay-how-you-drive models, is expected to further propel market expansion in Asia Pacific.

Emerging economies in Latin America, the Middle East, and Africa are gradually embracing Connected Usage-Based Insurance, though adoption rates remain comparatively lower than in developed regions. Challenges such as limited telematics infrastructure, varying regulatory landscapes, and lower consumer awareness present hurdles to widespread implementation. However, localized demand for affordable insurance, coupled with governmental efforts to modernize transportation and insurance sectors, is paving the way for gradual uptake. Insurers operating in these regions are increasingly forming strategic partnerships with technology providers to overcome infrastructure gaps and address the unique needs of their markets, signaling promising long-term growth potential.

Report Scope

Snapshot img { margin: 10px !important; } Telematics In Insurance Industry Market Size 2025-2029

The telematics in insurance industry market size is forecast to increase by USD 5.3 billion, at a CAGR of 21.2% between 2024 and 2029.

The global telematics market in insurance industry is expanding, driven by the adoption of telematics-enabled UBI which offers significant cost savings. This is reshaping insurance analytics by allowing insurers to create precise risk profiles from real-time driving behavior tracked by onboard units. This shift is supported by increasing smartphone penetration and government initiatives promoting telematics use. The on-board diagnostics telematics market, a key part of this ecosystem, facilitates easy data collection. The evolution toward proactive risk management and improved operational efficiency is transforming the traditional insurance model, creating a more data-centric paradigm that benefits both insurers and policyholders.Optimized customer communication is a key trend, with insurers using mobile apps and aggregated data for better engagement. This strategy enhances customer retention and improves sales targeting. However, the market growth is constrained by safety and security concerns. The risk of hacking wireless communication systems and the potential for malware to infiltrate a vehicle's controller area network (CAN) bus pose significant threats. The automotive aftermarket telematics market must address these vulnerabilities to maintain consumer trust. Protecting personal information is critical as these systems handle sensitive user data, influencing the trajectory of both commercial telematics and the broader automotive telematics market.

What will be the Size of the Telematics In Insurance Industry Market during the forecast period?

Explore in-depth regional segment analysis with market size data - historical 2019 - 2023 and forecasts 2025-2029 - in the full report.
Request Free SampleThe market is defined by a strategic shift from basic usage-based insurance to holistic, data-centric models focused on proactive risk management and operational efficiency. This evolution in the automotive telematics market is driven by sophisticated data analytics, leveraging AI for a more nuanced understanding of risk that goes beyond simple metrics. The integration of contextual information and video data allows for deeper insights into driving behavior. This ongoing development is reshaping the relationship between insurers and the insured, fostering a continuous partnership in risk mitigation through advanced insurance analytics and personalized feedback mechanisms.The technological landscape is advancing from aftermarket hardware toward more integrated solutions. The on-board diagnostics telematics market is seeing increased competition from smartphone applications and embedded telematics control units in connected vehicles. This transition reduces customer friction and improves data reliability. The deepening integration between automotive OEMs and insurers reflects a broader trend within the digital insurance market toward seamless data acquisition. This dynamic is creating new opportunities for value-added services, enhancing both risk assessment accuracy and the overall customer experience in the passenger vehicle telematics market.

How is this Telematics In Insurance Industry Industry segmented?

The telematics in insurance industry industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD million" for the period 2025-2029, as well as historical data from 2019 - 2023 for the following segments. DeploymentOn-premisesCloudUsagePAYDPHYDMHYDTechnologyEmbedded OEM moduleOBD-II dongleSmartphone-centricHardwiredGeographyNorth AmericaUSCanadaMexicoAPACChinaIndiaJapanSouth KoreaAustraliaIndonesiaEuropeGermanyUKFranceItalySpainThe NetherlandsSouth AmericaBrazilArgentinaChileMiddle East and AfricaUAESouth AfricaEgyptRest of World (ROW)

By Deployment Insights

The on-premises segment is estimated to witness significant growth during the forecast period.The on-premises deployment segment is experiencing notable growth within the global telematics market in insurance industry. This model is often chosen by customers who prioritize maintaining their data on-site, using their own servers for management and setup. The use of telematics and UBI has become fundamental to the vehicle insurance sector, and on-premises solutions provide the necessary real-time insights into driver activities. This deployment method offers direct control over data security and infrastructure.As the volume of connected cars increases, on-premises deployment is expected to adequately manage connectivity requirements, including software updates and system turnaround times. This approach ensures that data processing and storage remain within the organization's control, a critical factor for many

Usage Based Insurance comes with extensive industry analysis of development components, patterns, flows, and sizes. The report calculates present and past market values to forecast potential market management during the forecast period between 2024 - 2032.