What is the usage-based insurance market?

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 tracking .

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.