Usage-Based Insurance Market to Reach $123 Billion by 2022, Globally-Allied Market Research
According to a new report published by Allied Market Research, titled, "Usage-Based Insurance Market by Product Type (Pay-As-You-Drive Insurance (PAYD), Pay-How-You-Drive Insurance (PHYD), and Manage-How-You-Drive Insurance (MHYD) and Technology (OBD-II-Based UBI Programs, Smartphone-Based UBI Programs, Hybrid-Based UBI Programs, and Black-Box-Based UBI Programs): Global Opportunity Analysis and Industry Forecast, 2014-2022," the global usage-based insurance market is expected to garner $123 billion by 2022, growing at a CAGR of 36.4% from 2016 to 2022. North America is expected to grow at the fastest pace during the forecast period, owing to the upsurge in demand from the U.S. and Canada.
Pay-as-you-drive (PAYD) product type segment accounted for the largest market share in 2015 owing to its cost efficiency. Manage-how-you-drive (MHYD) is anticipated to grow at the fastest rate from 2016 to 2022, as it provides higher level of freedom and flexibility to the customers.
In terms of market by technology, the Black-box technology segment accounted for the maximum market share in 2015, as it is highly secure and reliable. Moreover, the popularity of black-box has increased in the global market owing to its accurate and timely data collection capabilities. Smartphone technology is anticipated to witness fastest growth in the global usage-based insurance market, primarily driven by its convenience features.
"Consistent improvements in telematics based data collection and analysis techniques have led to the growth of Usage-based insurance market. Insurance companies are diversifying into the business segment in order to capitalize upon the upcoming business opportunity," states Sheetanshu Upadhayay, Research Analyst, Consumer Goods at AMR.
Europe accounted for largest revenue share in usage-based insurance market in 2015. The market in the region is anticipated to grow at a notable pace in the coming years, owing to rise in awareness towards drivers' safety and increased penetration of such services among the youth population. Market penetration of pay-as-you-drive is relatively higher in the region due to its cost efficiency.
North America is anticipated to witness the fastest growth rate owing to increased penetration of usage-based insurance services in the U.S. and Canada. Popularity of such services has particularly increased among youth and teenagers, which is one of the major growth factors. The U.S. is witnessing increase in the demand of MHYD services owing to superior benefits of flexible driving and roadside assistance facilities.