Global Automotive Usage-Based Insurance Market – High Demand for Embedded UBI to Boost Growth | Technavio

Business Wire

LONDON--(BUSINESS WIRE)-- The global automotive usage-based insurance market is expected to grow at a CAGR of close to 7% from 2018-2022, according to a new market research report by Technavio.

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Technavio has published a new market research report on the global automotive usage-based insurance market 2018-2022 under their automotive library. (Graphic: Business Wire)

Global automotive usage-based insurance market segmentation by application and geography

Technavio’s report on the global automotive usage-based insurance market analyses the business dimensions and presents a comprehensive breakdown in terms of market segmentation by application, which includes automotive embedded UBI and automotive app-based UBI. The global automotive UBI market is expected to grow to 123.12 mn units by 2022.

“Embedded UBI solutions use external devices fitted into vehicles’ onboard diagnostics to collect data about the driving behavior. The data is transmitted to the insurer for optimum premium pricing. As the requirement of an external device posed as a challenge for the adoption of embedded UBI, app-based UBI saw huge adoption in the last 2-3 years. However, the adoption of the Linux-based embedded application framework increased the flexibility of the system and led to its wider in-vehicle applications. This system allows the collection of data directly through vehicle embedded system instead of using an external device. Hence, embedded UBI will witness a stronger growth than app-based UBI solutions during the forecast period,” says a senior analyst at Technavio for automotive services research.

Based on geography, the global automotive usage-based insurance market has been segmented APAC, North America, and Europe. Europe dominated the global automotive UBI market in 2017, with a share of 49.82% owing to the legislative push from governments that support data-driven approaches for premium calculation. The automotive UBI market in APAC is in its nascent stage compared with other regions and accounted for the lowest share in 2017. However, it is expected to witness the highest growth among all regions during the forecast period to reach close to 14% share in 2022.

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Other topics covered in the report:

Market drivers:

Flexible pricing scheme
Lower accidents and vehicle theft possibilities

Market challenges:

High cost of telematics device installation
Maintenance of data accuracy for optimum UBI scores

Market trends:

Shared data plans to reduce data subscribers per user
Big data platform provided by connected cars to push further developments in UBI

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