A type of motor insurance that is designed to determine the premium of the vehicle by monitoring the driving behavior of the people is known as usage based insurance. In order to track the vehicle’s behavior, a wireless device is fitted in the vehicle that transmits the data to the insurance company whenever the premium is to be charged. Owing to rising vehicles and accidents that do a major damage to the vehicle usage based insurance, a dedicated market for the same exists from a global perspective.
Usage Based Insurance Market: Overview
Usage-based insurance refers to a type of auto insurance, which utilizes the in-vehicle
communication systems to keep a track of driving behavior and mileage. Use of telematics systems
gives precise and accurate feedback of the driving patterns and safety practices of the driver.
Telematics refers to a method of vehicle monitoring, which combines on-board diagnostics with the
GPS system to track behavior of the vehicle. Such a technology enables the insurance companies to
alter the insurance cost based on the risk thus estimated.
Allstate Insurance Company, State Farm Mutual Automobile Insurance Company, UnipolSai
Assicurazioni S.p.A, Insure The Box Limited, Intelligent Mechatronic Systems Inc, and Allianz SE are
some of the companies dominating the global usage-based insurance market.
Transparency Market Research has come up with an all-inclusive study on the global usage-based
insurance market, for the period 2019 to 2027. The report predicts that the global usage-based
insurance market is likely to clock a staggering 30% CAGR over the period of review. The market is
estimated to reach US$ 200 Bn through 2027.
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Growing Interest of Insurance Providers likely to Support Growth of the Market
The evolution of the automotive usage based insurance industry is directly linked with the
advancement of the automotive industry. The demand for automotive insurance is directly
proportional to the sale of vehicles fitted with connected car and telematics services. In addition to
that, increased focus on remote diagnostics by the providers of insurance is likely to encourage
growth of the global usage-based insurance market. Adoption and use of advanced on-board
communication devices to facilitate real-time connectivity between insurance providers and the
vehicle helps in the diagnosis of breakdown issues.
The expansion of the glob