The usage-based insurance (UBI) market is rapidly reshaping the global automotive insurance landscape. According to a recent report by Global Market Insights, the global UBI market is projected to expand from USD 24 billion in 2019 to USD 125.7 billion by 2027, with a robust compound annual growth rate (CAGR) of 23.0%.

This surge is driven by several key factors:

1. Flexible premium structures: Unlike traditional policies, UBI premiums are usage-based, making them more adaptive and fair for consumers.
2. Telematics regulations: Governments are increasingly mandating or encouraging the use of vehicle telematics, supporting UBI implementation.
3. Connected vehicles on the rise: More vehicles are now equipped with IoT technology, providing insurers with real-time driving data.
4. Increased vehicle ownership: With more vehicles on the road, insurers are seeking innovative ways to differentiate.
5. Post-COVID shifts: The pandemic reduced travel frequency, making pay-as-you-drive policies more appealing to drivers seeking cost-effective options.

North American Market Overview

North America, particularly the United States, has led the early adoption of UBI. Currently, the usage-based insurance market penetration rate in the U.S. is about 5%, but by 2024, North America is projected to account for over 35% of the global UBI market. In fact, 70% of auto insurance providers in the region were already offering UBI programs as early as 2021.

European Market Overview

Europe has a lower UBI penetration, around 2%, but holds vast growth potential. The market is primarily driven by black box-based telematics systems, including both wired and wireless devices. With growing adoption of in-vehicle systems like eCall and connected car services, the European market is set to experience a CAGR of 24.6% from 2019 to 2027, reaching USD 43.3 billion by the end of the forecast period.

• Italy: UBI pioneer in Europe, with a 16% penetration rate. PHYD (Pay-How-You-Drive) policies dominate, accounting for one-third of global PHYD revenue.
• UK: UBI holds 3% of the local market, driven by younger drivers seeking lower premiums and insurance companies aiming to reduce costs.
• Rest of Europe: UBI adoption remains modest (~2%), hindered by a conservative approach. However, opportunities remain for insurers willing to innovate.

Asia-Pacific and Emerging Markets

• Japan: A mature insurance market where mile-based UBI models are gaining traction. Insurers are showing growing interest in deploying data-driven policy models.
• Australia: UBI adoption is in early stages, with select insurers beginning implementation.
• Latin America: UBI is limited to a few pilot programs, reflecting untapped potential.

Empower Your Insurance Offering with JimiIoT & Concox

If you plan to explore or scale your UBI business, JimiIoT’s usage-based insurance solutions offer an intelligent and equitable way to manage premiums. By leveraging real-time driving behavior, mileage tracking, and advanced analytics, JimiIoT enables insurers to build competitive, user-friendly, and data-driven products.

📩 For more information, contact us at: info@jimiIoT.com