Press Release

Global Automotive Usage Based Insurance Market to Grow at a CAGR of 21.4% During the Period 2024-2032, Driven by Increasing Use of Smartphones and Benefits of Usage Based Insurance

Global Automotive Usage Based Insurance Market

According to a new report by EMR titled, ‘Global Automotive Usage Based Insurance Market Report and Forecast 2024-2032’, the global automotive usage based insurance market is expected to grow at a CAGR of 21.4% during the period 2024-2032, led by advancements in technology.

The global automotive usage based insurance market is expected to be driven by benefits afforded by usage based insurance, including improved driving, possibly lower premiums, possible reduction in road accidents, enhanced road safety, and better insurance products. Increasing use of smartphones offers opportunities to strengthen customer relations, and is likely to help market growth. Companies coming together to combine capabilities and offer innovative and data-driven services are also expected to contribute to market growth. North America and Europe are likely to be key markets.

 

Leading companies are coming together to offer usage based insurance to new vehicle owners. For example, in 2022, Otonomo Technologies Ltd. entered into an agreement to acquire The Floow, a SaaS provider of connected insurance technology for key carriers across the globe.  Combined vehicle and mobile data from Otonomo and The Floow would enable innovative, usage based and behavioural based insurance products, and the shift from “detect and repair” to “predict and prevent” models to generate safer, greener and smarter driving experiences for policyholders.

 

In 2022, OCTO Telematics announced a new agreement with Ford Motor Company to spread its data streaming partnership into Europe. The agreement built upon the initial agreement signed in the North American market in 2021. By leveraging Ford’s connected vehicle data, OCTO would enhance its telematics services in insurance and analytical services in the UK, Italy, Germany, France and Spain. Such developments are expected to drive the global automotive usage based insurance market.

 

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In 2021, Linear Assicurazioni partnered with Cambridge Mobile Telematics (CMT) to launch the first Try-Before-You-Buy program for Italian drivers. Linear Assicurazioni announced the launch of “Linear Drive&Save”, a mobile-only program that invited drivers of all ages to exhibit how safely they drove and receive up to a fifteen percent discount on their car’s insurance policy. Such efforts are likely to stimulate the global automotive usage based insurance market.

 

In 2021, Mercury Insurance launched its usage-based insurance mobile app, MercuryGO, in Oklahoma, making it the second state after Texas in which the program became available. Enrollees would receive a 5% discount for participating; the discount could go up to 10% for teen drivers. Total discounts could go up to 40%. The app provided real-time feedback about driving behaviour, based on parameters such as over speeding, hard braking, phone motion, screen interaction, and road type.

 

In 2021, Cambridge Mobile Telematics (CMT) acquired TrueMotion. The acquisition united the two leading companies in the rapidly growing mobile telematics industry. CMT would offer telematics services to 21 out of the 25 largest auto insurers in the United States, and across over twenty countries, including Canada, the United Kingdom, Germany, South Africa, Japan, and Australia.

 

In 2022, Travelers Companies Inc. expanded its telematics auto insurance offering, IntelliDrive, by launching an app-based program called IntelliDrivePlus. While IntelliDrive launched in 2017 and was available in 40 states (it calculated a premium based on driving behaviours, excluding mileage, tracked over a 90-day period), IntelliDrivePlus calculated a premium at each renewal by measuring changes in mileage and driving behaviour, like braking, acceleration, speed, time of day and distraction. IntelliDrivePlus became available to customers in Arkansas, Nebraska and Ohio.

 

In 2021, TomTom (TOM2) and Loop announced a new multiyear agreement according to which TomTom would provide Loop with speed profiles, traffic statistics and maps to help Loop customers make safer driving choices and receive insurance rates based on fair, bias-free criteria.

 

Key Findings of the Report:

  • Benefits of usage based insurance expected to drive global automotive usage based insurance market.
  • Developments in technology expected to drive market growth.
  • North America and Europe are projected to be key markets.

 

Market Analysis by Package, Vehicle Type, Technology and Region:

  • By package, the market is segmented into Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), and Manage-How-You-Drive (MHYD).
  • By vehicle type, the market is divided into Passenger Vehicles, Light Commercial Vehicle, and Heavy Commercial Vehicle.
  • By technology, the market is classified into Black Box, Smartphone, Embedded Telematics, On-Board Diagnostics (OBD), and Others.
  • By region, the market is segmented into North America, Europe, Asia Pacific, Latin America, and Middle East and Africa.

 

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