The usage-based insurance (UBI) market, valued at USD 49.4 billion in 2023, is on track to expand at a CAGR of 28.7%, reaching USD 288.4 billion by 2030. This growth is largely driven by advancements in telematics and the increasing demand for customized insurance plans that promote safer driving and lower premiums.
One key factor fueling this expansion is the rise of Pay-How-You-Drive (PHYD) policies, which reward drivers for adopting safe driving habits. As consumers seek greater connectivity and intelligence in their vehicles, insurers are leveraging advanced telematics to assess a wide range of driving metrics. This technology enables insurers to determine premium rates more accurately while also improving overall road safety. With telematics adoption on the rise, the market continues to gain momentum.
Financial Technology News: OppFi Upsizes Credit Facility with Blue Owl Capital to $300M
Growing Popularity of UBI Among Car Owners
UBI proves especially beneficial for car owners who drive infrequently, allowing them to reduce premium costs. The “pleasure” segment—drivers who use their cars only occasionally—has shown increased interest in these policies. The COVID-19 pandemic further accelerated UBI adoption as travel restrictions led insurers to introduce more flexible and customized policies. Many policyholders, particularly those with multiple vehicles, have opted for UBI plans that cover several cars under a single policy. As a result, the pleasure segment is projected to witness significant growth.
Financial Technology News: AMP Launches New Digital Bank: A Game Changer for Small Businesses
Regulatory Support Driving UBI Expansion in Asia-Pacific
Several countries, including South Korea, Japan, India, Thailand, and Singapore, have implemented favorable regulatory policies to promote UBI adoption. For example, in March 2021, MSIG partnered with insurtech firm AIS to launch usage-based car insurance in Thailand through a government regulatory sandbox. Similarly, in July 2022, the Insurance Regulatory and Development Authority of India (IRDAI) approved UBI add-ons for insurance policies. Meanwhile, in October 2021, Singapore-based Carro introduced an AI-powered pay-per-km car insurance plan, further demonstrating how regulatory support is propelling market growth across the Asia-Pacific region.
Industry Leaders Strengthening Their Market Position
Leading companies in the UBI market are actively expanding their portfolios to meet rising consumer demand. Many insurers are forming strategic partnerships with government agencies and industry players to enhance their offerings. Key market participants include Allstate, AXA, GEICO, Liberty Mutual, Mapfre, Progressive, State Farm, Travelers, Unipolsai, and USAA. As competition intensifies, these firms continue to innovate, ensuring sustained growth in the evolving UBI landscape.
Financial Technology News: 10x Banking Named a ‘Luminary’ in Celent’s Next-Gen Core Banking Platforms Report This report provides an in-depth look at the explosive growth of the Web 3.0 market, projected to reach USD 195.7 billion by 2030. It offers key insights into how blockchain, tokenization, and smart contracts are reshaping industries like finance, real estate, and entertainment. For anyone looking to understand the next frontier of digital transformation, this is a must-read.
To share your insights with the FinTech Newsroom, please write to us at news@intentamplify.com
Source – Intent Market Research
