Pune, India -- (SBWIRE) -- 03/21/2019 -- In terms of revenue, the global Automotive Usage Based Insurance Market is expected to grow to US$ 105.12 billion in 2027 from US$ 15.62 billion in 2018. The demand for automotive usage based insurance is highly propelled in recent years, with the increasing adoption of telematics in the vehicles as well as increasing adoption of mobility-as-a service. However, lack of awareness for regarding automotive usage based insurance in emerging economies is restraining the automotive usage based insurance market growth to a certain extent.

The automotive usage based insurance market is highly fragmented as the industry is captured by several well-established players as well as emerging players across the globe. From the investment scenario, the insurance companies and the telematics companies operating in the developing countries, as well as developed countries, are scoring significant investments, which is helping the automotive usage based insurance market to witness the upswing in the recent times. The governments of several countries are simplifying their insurance legislation, which is another factor driving the automotive usage based insurance market.

On the basis of technology fitted, dongles are currently is the leading segment of the global automotive usage based insurance market. However, the dongles segment is anticipated to lose its dominance to black box during the forecast period. Also, the demand for smartphones segment is expected to increase. As their UBI business grows, insurance providers may invest in OBDII and offer this on a long-term basis to specific customer segments.

The overall automotive usage based insurance market size has been derived using both primary and secondary source. The research process begins with exhaustive secondary research using internal and external sources to obtain qualitative and quantitative information related to the automotive usage based insurance market. It also provides the overview and forecast for the global automotive usage based insurance market based on all the segmentation provided with respect to major reasons such as North America, Europe, Asia-Pacific, and Rest of World. Also, primary interviews were conducted with industry participants and commentators in order to validate data and analysis. The participants who typically take part in such a process include industry expert such as VPs, business development managers, market intelligence managers, and national sales managers, and external consultant such as valuation experts, research analysts, and key opinion leaders specializing in the automotive usage based insurance industry.

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Pay-as-you-drive (PAYD) insurance is a method that calculate rates on a constant basis, generally monthly. These rates are based on the information gathered on how much you drive. Therefore, changes in driving patterns monthly is reflected on customers' premium. If a customer has driven long distances in a particular month then, higher rate is expected. This type of UBI is dynamic in nature and reflects changes in behavior quickly. One of the biggest restrain for PAYD market growth is the installation of GPS device in the vehicle. The installation of device results in sharing information with the insurance provider thus, several customers consider it as an invasion to their privacy. However, increasing trend for mobility-as-a-service is expected to drive the PAYD market growth.

Even though PAYD tariffs do not acknowledge the driving habits of the insured including speed, location, breaking behavior, time and thus lack the competence to evaluate the driver's risk completely, pricing based on distance can help in reducing total insurance as well as claims costs, traffic congestion, energy consumption, pollution emissions, or vehicle crashes as a positive environmental impact.

The global automotive usage based insurance market by geography is segmented into four regions including North America, Europe, Asia Pacific, and Rest of World. Market is currently dominated by North America followed by Europe however, the market in Asia Pacific is growing at a highest CAGR. Some of the key players operating in the automotive UBI market report includes Vodafone Automotive, Liberty Mutual insurance Company, Allianz Insurance, TomTom Telematics, Allstate Insurance, Octo Telematics, Metromile, Siera Wireless, Ingenie Service Ltd., AXA Insurance, UnipolSai Assicurazioni S.p.A., and MetaSystems among others. Several other companies are also functioning in the market which adds substantial revenues in the market year on year.

With the constant evolvement of the telematics industry and its rapid adoption within the automotive sector, new partnerships are developing amongst insurers, automotive manufacturers, device OEMs, and telematics solution providers. These partnerships are aimed at taking advantage of the emerging data-driven technology.

The automotive UBI remains a relative niche market; however, it is currently witnessing steady growth. The automotive UBI value chain includes multiple industries. Some of the UBI providers with a remarkable presence in the market include UnipolSai, Progressive, State Farm, Generali, Allstate, Intact, Allianz, and Insure The Box. The UBI players' can either develop their telematics programs or depend on partners to varying degrees. Prominent telematics providers in the UBI field include Vodafone Automotive, Octo Telematics, and LexisNexis Risk Solutions, Cambridge Mobile Telematics, Intelligent Mechatronic Systems, Baseline Telematics, The Floow, Modus, and DriveFactor. Moreover, automotive OEMs are gradually taking a vigorous part in the ecosystem. These OEMs include General Motors, Renault-Nissan, Daimler, Ford, BMW, and Fiat. Additionally, mobile operators such as Telefónica, Vodafone, Verizon, and Sprint are also providing insurance telematics solutions by working together with telematics partners.

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In the recent few years, automotive UBI market has noticed noteworthy M&A and partnership activity. Some of the significant deals include Trak Global Group's acquisition of Intelligent Mechatronic Systems Inc. in 2018 and Octo Telematics acquisition of Willis Towers Watson's DriveAbility solution and the DriveAbility Marketplace in 2017. Also, in 2018, Vodafone and Generali Spain joined forces with an aim to promote digital transformation in the telematics insurance segment. Moreover, in 2016, Intact Financial Corporation invested in Metromile, a car insurance company based in San Francisco.
The automotive UBI insurance is most commonly adopted by the young population as they are more comfortable with technology and open to benefit from lower premiums. In Italy and US markets, UBI is aimed at a diverse range of drivers. Furthermore, awareness has been a hurdle to growth particularly in the U.K. market, where UBI has been aimed chiefly at the fleet market as well as young drivers. However, with the increasing rewarding programs introduced by the UBI players, the market is witnessing immense traction.

In the current automotive insurance industry, the UBI or telematics insurance is at a nascent stage, as very few countries have adopted the technology heavily. The automotive insurance companies are increasingly partnering with telematics companies to expand their telematics insurance or UBI segment in the current market scenario and also for the future. Additionally, several companies operating in the global UBI market is continuously taking initiatives to attract consumers with various attractive policies and technologies. The UBI market is highly fragmented as the industry is captured by several well-established players as well as emerging players across the globe. From the investment scenario, the insurance companies and the telematics companies operating in the developing countries, as well as developed countries, are scoring significant investments, which is helping the UBI market to witness the upswing in the recent times. The governments of several countries are simplifying their insurance legislation, which is another factor driving the UBI market.

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7. Examine the political, economic, social and technology impact of the five regions namely: North America, Europe, Asia Pacific, Middle East & Africa and South America.

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