Usage-Based Insurance Market Report 2025 | Growth, Trends, and Forecast by 2033

# Usage-Based Insurance Market Report 2025 | Growth, Trends, and Forecast by 2033 <h2>Market Overview:</h2> According to IMARC Group's latest research publication, "Usage-Based Insurance Market: Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2025-2033", the global<a href="https://www.imarcgroup.com/usage-based-insurance-market"> usage-based insurance market size</a> reached USD 62.35 Billion in 2024. Looking forward, IMARC Group expects the market to reach USD 355.45 Billion by 2033, exhibiting a growth rate (CAGR) of 20.27% during 2025-2033. This detailed analysis primarily encompasses industry size, business trends, market share, key growth factors, and regional forecasts. The report offers a comprehensive overview and integrates research findings, market assessments, and data from different sources. It also includes pivotal market dynamics like drivers and challenges, while also highlighting growth opportunities, financial insights, technological improvements, emerging trends, and innovations. Besides this, the report provides regional market evaluation, along with a competitive landscape analysis. <h2>How AI is Reshaping the Future of Usage-Based Insurance Market</h2> <ul> <li style="font-weight: 400;">AI processes real-time telematics data from vehicles, analyzing driving behaviors like speed, braking, and acceleration patterns, enabling insurers to offer 25% more accurate risk assessments and personalized premium calculations.</li> <li style="font-weight: 400;">Machine learning algorithms reduce claims processing time by 40%, with 84% of health insurers already utilizing AI and machine learning in their operations, marking a significant shift in regulatory oversight and industry adoption.</li> <li style="font-weight: 400;">Companies like Progressive leverage AI-driven Snapshot programs, combining telematics with predictive analytics to reward safe drivers, while Aviva's AI models cut liability assessment time by 23 days and reduced customer complaints by 65%.</li> <li style="font-weight: 400;">AI-powered chatbots and virtual assistants provide 24/7 customer service for UBI policy inquiries, with 80% of insurance transactions now moving online, improving customer satisfaction scores by 36 percentage points.</li> <li style="font-weight: 400;">The global AI in insurance market reached USD 5.29 billion in 2024 and is projected to hit USD 45 billion by 2035, with AI enhancing fraud detection by analyzing driving patterns and identifying anomalies that save insurers millions annually.</li> </ul> Download a sample PDF of this report:<a href="https://www.imarcgroup.com/usage-based-insurance-market/requestsample"> https://www.imarcgroup.com/usage-based-insurance-market/requestsample </a> <h2>Key Trends in the Usage-Based Insurance Market</h2> <ul> <li style="font-weight: 400;">Smartphone-Based Telematics Gaining Traction: Mobile apps are replacing traditional OBD-II devices, making UBI more accessible and cost-effective. Insurers like Zuno General Insurance launched crash detection-enabled car insurance through smartphone apps, offering instant roadside assistance and faster claims processing without additional hardware.</li> <li style="font-weight: 400;">Connected Vehicle Integration: Automakers are embedding telematics directly into new vehicles, with factory-installed sensors and IoT technologies eliminating the need for aftermarket devices. Stellantis partnered with bolt to offer embedded insurance programs for Chrysler, Dodge, Jeep, Ram, Fiat, and Alfa Romeo customers, leveraging built-in telematics data.</li> <li style="font-weight: 400;">Pay-How-You-Drive (PHYD) Dominance: PHYD models focus on driving behavior rather than just mileage, with safe drivers receiving up to 20% discounts. This segment holds 60.6% of the market share, rewarding responsible driving habits through real-time feedback and continuous monitoring.</li> <li style="font-weight: 400;">Electric Vehicle (EV) UBI Programs: As EV sales surge, insurers are developing specialized UBI products for electric vehicles. Citroen India partnered with ICICI Lombard to launch usage-based insurance for the eC3 electric vehicle, linking premiums to driving behavior and encouraging responsible EV ownership.</li> <li style="font-weight: 400;">Real-Time Driver Feedback Systems: Insurers are implementing immediate feedback mechanisms through apps that alert drivers about harsh braking, speeding, or unsafe behaviors, helping reduce accident rates by 25% among active users while promoting safer driving habits.</li> </ul> <h2>Growth Factors in the Usage-Based Insurance Market</h2> <ul> <li style="font-weight: 400;">Rising Demand for Fair and Transparent Pricing: Consumers, especially younger drivers and those with low mileage, are seeking insurance models that reflect their actual driving habits rather than broad demographic categories. UBI offers personalized premiums, making insurance more affordable for safe drivers and low-mileage users.</li> <li style="font-weight: 400;">Proliferation of Telematics Technology: The extensive adoption of GPS, accelerometers, and onboard diagnostics enables real-time data collection on driving behavior. Ptolemus reports that about 20 million of the 875 million motor insurance plans in force globally are now usage-based, reflecting rapid technological integration.</li> <li style="font-weight: 400;">Government Initiatives for Road Safety: Regulatory bodies are implementing policies to reduce road accidents. The WHO reports 1.3 million annual road traffic deaths, with 93% occurring in low- and middle-income countries. Governments are supporting UBI as a proactive solution to incentivize safer driving behaviors.</li> <li style="font-weight: 400;">Partnership Expansion Between Insurers and Tech Companies: Strategic collaborations are accelerating UBI adoption. CerebrumX partnered with Ford to support data-driven UBI-as-a-Service models, while The Floow and Otonomo Technologies partnered with Definity and Munich Re to bring innovative UBI products to Canada.</li> <li style="font-weight: 400;">Connected and Autonomous Vehicle Growth: The Insurance Institute for Highway Safety anticipates 3.5 million self-driving vehicles on US roads by 2025 and 4.5 million by 2030. These connected vehicles generate vast amounts of driving data, enhancing UBI capabilities and expanding market opportunities.</li> </ul> Ask analyst of customized report:<a href="https://www.imarcgroup.com/request?type=report&id=3840&flag=E"> https://www.imarcgroup.com/request?type=report&id=3840&flag=E</a> <h2>Leading Companies Operating in the Global Usage-Based Insurance Industry:</h2> <ul> <li style="font-weight: 400;">Aioi Nissay Dowa Insurance UK Ltd</li> <li style="font-weight: 400;">Allianz SE</li> <li style="font-weight: 400;">Allstate Insurance Company</li> <li style="font-weight: 400;">American International Group Inc.</li> <li style="font-weight: 400;">Assicurazioni Generali S.p.A.</li> <li style="font-weight: 400;">AXA</li> <li style="font-weight: 400;">Liberty Mutual Insurance Company</li> <li style="font-weight: 400;">Mapfre S.A.</li> <li style="font-weight: 400;">Progressive Casualty Insurance Company</li> <li style="font-weight: 400;">State Farm Automobile Mutual Insurance Company</li> <li style="font-weight: 400;">TomTom International BV.</li> <li style="font-weight: 400;">UnipolSai Assicurazioni S.p.A.</li> </ul> <h2>Usage-Based Insurance Market Report Segmentation:</h2> <h3>Breakup By Type:</h3> <ul> <li style="font-weight: 400;">Pay-As-You-Drive (PAYD)</li> <li style="font-weight: 400;">Pay-How-You-Drive (PHYD)</li> <li style="font-weight: 400;">Manage-How-You-Drive (MHYD)</li> <li style="font-weight: 400;">Others</li> </ul> Pay-As-You-Drive (PAYD) accounts for the majority of shares, holding around 55.2% of the market, as it allows policyholders to pay premiums based on distance driven, appealing to low-mileage drivers and environmentally conscious consumers. <h3>Breakup By Technology:</h3> <ul> <li style="font-weight: 400;">OBD II</li> <li style="font-weight: 400;">Black Box</li> <li style="font-weight: 400;">Smartphones</li> <li style="font-weight: 400;">Others</li> </ul> Black box dominates the market with around 40.3% share, providing comprehensive telematics tracking of driving habits including speed, braking, acceleration, and cornering for more equitable pricing and safer driving promotion. <h3>Breakup By Vehicle Type:</h3> <ul> <li style="font-weight: 400;">Light-duty Vehicle (LDV)</li> <li style="font-weight: 400;">Heavy-duty Vehicle (HDV)</li> </ul> Light-duty vehicle (LDV) leads the market with around 85.8% market share, offering fuel efficiency, flexibility, and crucial support for electric mobility adoption. <h3>Breakup By Vehicle Age:</h3> <ul> <li style="font-weight: 400;">New Vehicles</li> <li style="font-weight: 400;">Used Vehicles</li> </ul> New vehicles lead the market with around 60.6% share, featuring factory-installed sensors, onboard diagnostics, and IoT technologies that eliminate the need for aftermarket devices and improve data accuracy. <h3>Breakup By Region:</h3> <ul> <li style="font-weight: 400;">North America (United States, Canada)</li> <li style="font-weight: 400;">Asia Pacific (China, Japan, India, South Korea, Australia, Indonesia, Others)</li> <li style="font-weight: 400;">Europe (Germany, France, United Kingdom, Italy, Spain, Russia, Others)</li> <li style="font-weight: 400;">Latin America (Brazil, Mexico, Others)</li> <li style="font-weight: 400;">Middle East and Africa</li> </ul> North America enjoys the leading position with 40.6% market share, driven by mature telematics adoption, favorable regulations, and strong partnerships between insurers and technology providers. <h2>Recent News and Developments in Usage-Based Insurance Market</h2> <ul> <li style="font-weight: 400;">October 2025: SBI General Insurance introduced its "Pay-As-You-Drive" car insurance policy, allowing customers to choose between kilometre-based coverage plans and pay premiums based on actual vehicle usage, marking a major milestone in India's UBI market.</li> <li style="font-weight: 400;">June 2025: Zuno General Insurance launched India's first crash detection-enabled car insurance through its Zuno Smart Drive app, using mobile telematics to offer real-time crash alerts, instant roadside assistance, and faster claims processing.</li> <li style="font-weight: 400;">May 2025: If P&C Insurance launched an embedded car-sharing insurance product on Socotra's cloud-native platform, enabling usage-based, on-demand coverage and expanding its presence in the sharing economy.</li> <li style="font-weight: 400;">August 2024: Zuno General Insurance launched the "Pay How You Drive" add-on using mobile telematics to assess driving behavior, offering personalized premiums and rewarding safe driving with discounts during renewals.</li> </ul> Note: If you require specific details, data, or insights that are not currently included in the scope of this report, we are happy to accommodate your request. As part of our customization service, we will gather and provide the additional information you need, tailored to your specific requirements. Please let us know your exact needs, and we will ensure the report is updated accordingly to meet your expectations. <h2>About Us:</h2> IMARC Group is a global management consulting firm that helps the world's most ambitious changemakers to create a lasting impact. The company provides a comprehensive suite of market entry and expansion services. IMARC offerings include thorough market assessment, feasibility studies, company incorporation assistance, factory setup support, regulatory approvals and licensing navigation, branding, marketing and sales strategies, competitive landscape and benchmarking analyses, pricing and cost research, and procurement research. <h2>Contact Us:</h2> IMARC Group 134 N 4th St. Brooklyn, NY 11249, USA Email: sales@imarcgroup.com Tel No: (D) +91 120 433 0800 United States: +1-201-971-6302