Automotive UBI to triple growth
The market for automotive usage-based insurance (UBI) will grow from $28.4bn in 2018 to nearly $96bn by 2025, according to research from MarketsandMarkets.
According to the report, the UBI market will increase at an annual growth rate of nearly 19% between 2018 and 2025.
The growth of the number of vehicles with telematics and connected-car services, and the lower insurance premiums associated with UBI, will drive the market, said the research firm.
MarketsandMarkets have hypothesised that North and South America will lead the UBI automotive market because of its high adoption rate of UBI for vehicles equipped with either OBD II or OE-fitted telematics units.
The research company estimates that pay-as-you-drive (PAYD) deals will be the largest market for UBI during its forecasted time. Ease of distribution, simple algorithms for working, and cost-effectiveness for the insurer as well as consumers, are just some of the many factors affecting the ascendency of PAYD.