Asia Pacific Automotive Usage-Based Insurance (UBI) Market to 2027
The increasing demand for mobility-as-a-service (MaaS) and various type of insurance premium policies are boosting the growth of the automotive UBI market. Moreover, the strategic partnerships among insurance companies and telematics companies are anticipated to propel automotive UBI market growth in the forecast period. In the last few years, the consumer behavior towards intercity and intracity transit has been transformed to a newer level. A significant percentage of travelers across the globe are no more willing to drive their own vehicles with an objective to avoid traffic. This has given rise to various other transit practices such as car sharing and ride-hailing in developed countries and developing countries. These practices are known as mobility as a service as the consumer avails the vehicle and the driver from a third party service provider. Mobility-as-a-Service aims to provide the consumer with end-to-end transportation with the use of different modes of transportation, thereby making substantial use of the existing transportation infrastructure in an area. The increasing traction of MaaS among the consumers is leading the third party service providers to procure increased count of vehicles so as to enhance the customer experience. With the rise in MaaS in these geographies, there has been a remarkable rise in the number of young drivers, who indulge themselves in rash driving, causing fatal accidents. With an objective to reduce vehicular accidents, several telematics providers and insurance companies are partnering with each other to develop advanced and robust insurance solutions. This is further pacing up the automotive UBI market in the current scenario. Another factor boosting the automotive UBI market through mobility-as-a-service is the rising trend of car sharing and ride-hailing in the developing regions such as India, Singapore, Malaysia, Australia, and Japan, among others.
The black box segment is one of the leading technology with the second highest market share in the Asia Pacific automotive UBI market. Moreover, the black box segment is anticipated to boost its dominance in the forecast period with the highest market share. A black box is a small device that is installed in the customer’s car to measure vehicle location, speed, driving frequency, distance traveled, and time of the day or night during the travel time. Further, other driving behaviors can also be measured, which includes monitoring braking and cornering. This helps in building a comprehensive profile of the driver. The data gathered on driving behaviors provides information on how safe the driving pattern is. This information is then converted into a score that is used by the car insurance provider for creating a customized premium for the driver. Also, an insurance provider can reward a driver securing a high score with a lower premium rate. However, issues related to data privacy is a major concern among customers’. Sharing personally identifiable information of customers’ gathered from black boxes with third parties such as law enforcement agencies or banks may result in the invasion of privacy. This may hinder the automotive UBI market growth to a certain extent.