Usage-Based Insurance Market Size & Share Analysis - Growth Trends & Forecasts (2025 - 2030)

The Global Usage-Based Insurance Market is Segmented by Package (Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), and Manage-How-You-Drive (MHYD)), Technology (OBD-II Dongle, Smartphone-Based, Black-Box/After-market Device, and Embedded Telematics (OEM)), Vehicle Type (Passenger Vehicles and Commercial Vehicles), and Geography (North America, South America, Europe, and More). The Market Forecasts are Provided in Value (USD).

Usage-Based Insurance Market Size and Share

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Usage-Based Insurance Market Analysis by Mordor Intelligence

The Global usage-based insurance market size is valued at USD 30.31 billion in 2025 and is expected to reach USD 60.91 billion by 2030, reflecting a 15.02% CAGR. Growth accelerates as regulators treat telematics as core infrastructure, compelling insurers to shift from static actuarial tables to real-time behavioral analytics. Commercial vehicle fleets, embedded-insurance APIs, and OEM-fitted connected-car platforms jointly expand data volumes, helping underwriters calibrate premiums with unprecedented precision. Reinsurers contribute fresh capital alongside variable-rate treaties that reward loss-ratio gains, further energizing the usage-based insurance market across mature and emerging economies. At the same time, privacy regulation and rising ADAS penetration introduce execution risks that vary by jurisdiction, nudging insurers to balance innovation with compliance.

Key Report Takeaways

  • By package type, Pay-How-You-Drive held 34.2% of the global usage-based insurance market share in 2024, while Manage-How-You-Drive is projected to advance at a 13.45% CAGR through 2030.
  • By vehicle type, commercial vehicles commanded 22.5% of the global usage-based insurance market size in 2024 and are forecast to expand at 16.76% CAGR between 2025-2030.
  • By technology, OBD-II devices led with 35.3% revenue share in 2024; smartphone-based systems post the fastest 14.52% CAGR to 2030.
  • By region, Europe retained a 26.8% revenue share in 2024, whereas Asia-Pacific is expected to grow at a 17.89% CAGR through 2030.

Segment Analysis

By Package: Behavioral Analytics Drive Market Evolution

Pay-How-You-Drive accounts for 34.2% of the global usage-based insurance market share in 2024, reflecting insurer comfort with mileage-adjusted and behavior-scored pricing. Premium discounts tied to braking, acceleration, and speed encourage safer driving, lowering claim severity. Manage-How-You-Drive, advancing at 13.45% CAGR, injects real-time coaching via app notifications and in-vehicle prompts that prevent incidents rather than merely pricing them. The transition toward proactive feedback elevates customer lifetime value because avoided claims sustain capital and smooth earnings, enhancing the usage-based insurance market.

Simultaneously, low-mileage drivers and urban commuters, who prioritize clear per-mile fees, continue to find value in Pay-As-You-Drive. This model appeals to individuals seeking cost-effective insurance solutions tailored to their specific driving habits. Insurers are now integrating mileage with behavioral metrics into unified indexes, a move that curbs adverse selection and fosters deeper customer engagement by rewarding safe and responsible driving. Progressive’s Snapshot and American Family’s DriveMyWay showcase a versatile approach, catering to both experienced drivers and tech-savvy newcomers. These programs leverage advanced telematics to provide real-time feedback and personalized pricing, enhancing customer satisfaction. These blended models underscore the industry's shift towards comprehensive, customer-focused offerings in global usage-based insurance, reflecting a broader trend of innovation and adaptability in the insurance market.

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Note: Segment shares of all individual segments available upon report purchase

By Technology: Smartphone Systems Challenge Hardware Dominance

OBD-II dongles contributed 35.3% of the global usage-based insurance market size in 2024 as insurers leveraged mature firmware and engine bus access for dependable data. These hardware units capture telemetry from harsh events and provide engine diagnostics, enabling detailed risk segmentation for both fleets and high-risk drivers. The ability to deliver dependable and granular data has made OBD-II dongles a preferred choice for insurers aiming to enhance underwriting accuracy and pricing models. Meanwhile, smartphone telematics is witnessing a surge, growing at a 14.52% CAGR. This growth is attributed to the elimination of installation costs and the utilization of native sensors for gyroscopic and GPS signals, making it more accessible for everyday consumers. The convenience and cost-effectiveness of smartphone telematics are driving its adoption, particularly among younger and tech-savvy demographics who prioritize ease of use and minimal setup requirements.

 Automakers like BMW, Kia, and Hyundai are rolling out embedded telematics APIs. These APIs transmit encrypted data packets straight from vehicle head units, allowing for insurer scoring without the need for aftermarket devices. This innovation reduces dependency on external hardware and enhances data security and accuracy by leveraging factory-installed systems. Furthermore, data-sharing consent is seamlessly integrated into infotainment menus, streamlining the onboarding process and enhancing conversion rates. By embedding consent mechanisms directly into the vehicle interface, automakers are simplifying user engagement and fostering trust among consumers. However, with OEM fee structures still in flux, carriers are adopting a cautious approach. They are leveraging a multi-source architecture that integrates signals from OBD-II, smartphones, and OEMs into cohesive scoring engines. This strategic flexibility bolsters their resilience and propels the growth of the usage-based insurance market. By maintaining diverse data sources, insurers can mitigate risks associated with reliance on a single technology while ensuring comprehensive and accurate risk assessments.

By Vehicle Type: Commercial Applications Lead Growth

In 2024, commercial fleets commanded a 22.5% share of the global usage-based insurance market. With operators increasingly adopting unified dashboards for logistics, safety, and coverage, this segment is set to experience a robust surge at a projected CAGR of 16.76%. These dashboards enable fleet operators to streamline operations, monitor driver behavior, and ensure compliance with safety standards, contributing to the segment's growth. Enhanced data consistency, achieved through professional driver training and fixed routes, empowers carriers to swiftly refine their risk assessments and optimize insurance offerings. Telematics platforms highlight the financial benefits, showcasing a 20% reduction in premiums and a 19% decrease in accident-related expenses. These figures underscore the value of integrated programs, solidifying the dominance of commercial fleets in the usage-based insurance landscape. Additionally, the ability to leverage real-time data and predictive analytics further strengthens the appeal of usage-based insurance for fleet operators, ensuring sustained growth in this segment.

While passenger vehicles present a vast potential in terms of sheer numbers, concerns over privacy and a patchwork of regulatory environments have tempered their adoption in the insurance market. Privacy concerns stem from the collection and use of sensitive data, which has led to hesitation among consumers. To alleviate data-sharing apprehensions, Insurers targeting this segment are prioritizing transparent opt-in policies and gamification strategies. These approaches aim to build trust and encourage participation by offering incentives and making the process more engaging for users. With the growing integration of Advanced Driver-Assistance Systems (ADAS), there is a potential shift in passenger insurance policies. They may evolve towards event-based micro-premium models, seamlessly merging vehicle sensor alerts with real-time pricing. This evolution could provide more personalized and cost-effective insurance solutions, ensuring the industry's upward trajectory continues. Furthermore, as regulatory frameworks gradually adapt to technological advancements, the passenger vehicle segment is expected to unlock additional growth opportunities in the usage-based insurance market.

Global Usage-Based Insurance Market : Market Share by Vehicle Type
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Geography Analysis

In 2024, Europe held steady with a 26.8% share of the usage-based insurance market due to an EU mandate on event-data recorders. This mandate has made telematics hardware a standard feature in new vehicles, driving widespread adoption. Clear regulatory guidance is enabling players to standardize their product designs across borders and is speeding up data-sharing agreements between OEMs and insurers, fostering collaboration and innovation. Even with the high costs of GDPR compliance, tech-savvy consumers in the region are willingly exchanging data for discounts, ensuring a consistent demand. This consumer acceptance, combined with regulatory support, positions Europe as a key player in the global usage-based insurance market.

Asia-Pacific is projected to grow at a robust 17.89% CAGR, leading the way in contributing to rising premiums until 2030. The region's swift embrace of smartphones, coupled with mobile-centric insurance onboarding and adaptable regulatory environments in places like Singapore and India, is empowering carriers to effectively test risk-scoring algorithms. These sandboxes allow insurers to refine their offerings and scale operations efficiently. In Australia and New Zealand, fleet-management adoption is set to surge from 26.6% to 39.5% by 2028, driven by increasing demand for commercial vehicle monitoring and optimization. This growth is expected to significantly bolster commercial volumes, painting a brighter picture for the usage-based insurance market. The region's dynamic regulatory and technological landscape makes it a hotspot for innovation and growth in the sector.

North America stands as a seasoned player, with giants like Progressive, Allstate, and State Farm rolling out nationwide initiatives while advocating for consistent privacy laws. These companies leverage their extensive networks and technological capabilities to maintain their competitive edge. Federal mandates for impaired-driving prevention systems, set for 2026-2029, promise to introduce new data streams, potentially boosting the usage-based insurance market by enabling more accurate risk assessments. However, the patchwork of state-level privacy regulations complicates matters, necessitating agile consent management and tailored regional pricing strategies. Despite these challenges, North America remains a critical market, with its mature infrastructure and established players driving steady growth and innovation in the usage-based insurance space.

Global Usage-Based Insurance Market  CAGR (%), Growth Rate by Region
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Competitive Landscape

The global usage-based insurance market exhibits moderate fragmentation. The top five players command just over half of the written premiums, creating a welcoming space for insurtech newcomers to innovate and capture market share. Progressive harnesses its expansive 27 billion-mile Snapshot dataset to enhance its machine-learning models, which significantly bolsters its underwriting advantages and enables more accurate risk assessment. Root Insurance showcases a shift in distribution strategies: direct-API distribution sidesteps traditional brokers, slashing acquisition costs while streamlining the customer acquisition process. This approach highlights the growing trend of leveraging technology to disrupt conventional insurance distribution channels.

Traditional insurers are doubling down on proprietary analytics to maintain competitiveness in the evolving market. Allstate has rolled out a patented, machine-learning-driven driver-assistance platform, offering personalized feedback to policyholders. This initiative aims to improve driving behavior and strengthen customer retention by providing added value. On another front, reinsurance behemoths like Munich Re and Swiss Re are backing niche UBI specialists. In exchange for their quota-share participation, these reinsurers gain access to detailed driving data, which enriches their portfolio analytics and enhances their ability to underwrite risk effectively. Meanwhile, Original Equipment Manufacturers (OEMs) and mobility platforms are intensifying competition by embedding insurance directly into leases or ride-hailing services. This strategy tightens distribution margins for traditional players and broadens market reach by integrating insurance into everyday mobility solutions, making it more accessible to consumers.

As costs for compliance, cloud processing, and data storage escalate, a wave of consolidation looms over the market. Mid-tier insurers, facing pressure to remain competitive, might find collaboration with telematics vendors, such as Cambridge Mobile Telematics or Octo Telematics. By sharing infrastructure with these vendors, insurers can reduce operational costs while preserving their brand identity and customer relationships. Over the forecast window, the ability to harness scale economics and depth in data science will be pivotal for survival in the usage-based insurance arena. Companies that can effectively leverage advanced analytics and optimize operational efficiencies are likely to emerge as leaders in this competitive market landscape.

Usage-Based Insurance Industry Leaders

  1. Progressive Corporation

  2. Allstate Corporation

  3. State Farm Insurance

  4. Liberty Mutual Insurance

  5. Aviva plc

  6. *Disclaimer: Major Players sorted in no particular order
Market Concentration
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Recent Industry Developments

  • February 2025: Allianz Partners and Cosmo Connected launched a USD 10.40 per month micromobility plan that embeds personal accident insurance within the Cosmo Fusion helmet.
  • January 2025: USAA exited its standalone Pay As You Drive program, signaling a pivot toward integrated telematics bundling.
  • January 2025: Qantev and InsureMO have joined forces in a global alliance, merging AI-driven claims optimization with insurance middleware. This collaboration aims to enhance operational efficiency and streamline processes for the insurance industry, leveraging advanced AI capabilities and middleware solutions. Together, they serve over 300 carriers globally, providing innovative tools to improve claims management and overall customer experience.
  • December 2024: Viasat and Yolo teamed up to integrate usage-based coverage into services for connected vehicles. This partnership aims to enhance the functionality of connected vehicle services by offering tailored coverage options based on usage patterns, ensuring greater flexibility and efficiency for users.

Table of Contents for Usage-Based Insurance Market Industry Report

1. Introduction

  • 1.1 Study Assumptions & Market Definition
  • 1.2 Scope of the Study

2. Research Methodology

3. Executive Summary

4. Market Landscape

  • 4.1 Market Overview
  • 4.2 Market Drivers
    • 4.2.1 Rising penetration of OEM-fitted connected-car platforms
    • 4.2.2 Lower premiums attracting cost-conscious younger drivers (mainstream)
    • 4.2.3 Fleet-management platforms bundling pay-per-mile cover (under-reported)
    • 4.2.4 Embedded-insurance APIs inside ride-hailing apps (under-reported)
    • 4.2.5 Variable-rate re-insurance treaties rewarding loss-ratio gains
  • 4.3 Market Restraints
    • 4.3.1 Heightened data-privacy regulation (GDPR, CPRA)
    • 4.3.2 Patchy actuarial track record for smartphone-only scoring (mainstream)
    • 4.3.3 OEM data-access fees inflating cost base (under-reported)
    • 4.3.4 Rising ADAS penetration shrinking risk pool (under-reported)
  • 4.4 Value / Supply-Chain Analysis
  • 4.5 Regulatory Landscape
  • 4.6 Technological Outlook
  • 4.7 Porter's Five Forces
    • 4.7.1 Threat of New Entrants
    • 4.7.2 Bargaining Power of Buyers
    • 4.7.3 Bargaining Power of Suppliers
    • 4.7.4 Threat of Substitutes
    • 4.7.5 Competitive Rivalry

5. Market Size & Growth Forecasts (Value, USD Bn)

  • 5.1 By Package
    • 5.1.1 Pay-As-You-Drive (PAYD)
    • 5.1.2 Pay-How-You-Drive (PHYD)
    • 5.1.3 Manage-How-You-Drive (MHYD)
  • 5.2 By Technology
    • 5.2.1 OBD-II Dongle
    • 5.2.2 Smartphone-based
    • 5.2.3 Black-Box/After-market Device
    • 5.2.4 Embedded Telematics (OEM)
  • 5.3 By Vehicle Type
    • 5.3.1 Passenger Vehicles
    • 5.3.2 Commercial Vehicles
  • 5.4 By Geography
    • 5.4.1 North America
    • 5.4.1.1 United States
    • 5.4.1.2 Canada
    • 5.4.1.3 Mexico
    • 5.4.2 South America
    • 5.4.2.1 Brazil
    • 5.4.2.2 Peru
    • 5.4.2.3 Chile
    • 5.4.2.4 Argentina
    • 5.4.2.5 Rest of South America
    • 5.4.3 Europe
    • 5.4.3.1 Germany
    • 5.4.3.2 United Kingdom
    • 5.4.3.3 France
    • 5.4.3.4 Italy
    • 5.4.3.5 Spain
    • 5.4.3.6 BENELUX (Belgium, Netherlands, and Luxembourg)
    • 5.4.3.7 Nordics (Sweden, Norway, Denmark, Finland)
    • 5.4.3.8 Rest of Europe
    • 5.4.4 Asia Pacific
    • 5.4.4.1 China
    • 5.4.4.2 India
    • 5.4.4.3 Japan
    • 5.4.4.4 South Korea
    • 5.4.4.5 Australia
    • 5.4.4.6 South East Asia
    • 5.4.4.7 Indonesia
    • 5.4.4.8 Rest of Asia
    • 5.4.5 Middle East & Africa
    • 5.4.5.1 United Arab Emirates
    • 5.4.5.2 Saudi Arabia
    • 5.4.5.3 South Africa
    • 5.4.5.4 Nigeria
    • 5.4.5.5 Rest of Middle East

6. Competitive Landscape

  • 6.1 Market Concentration
  • 6.2 Strategic Moves
  • 6.3 Market Share Analysis
  • 6.4 Company Profiles (includes Global level Overview, Market level overview, Core Segments, Financials as available, Strategic Information, Market Rank/Share for key companies, Products & Services, and Recent Developments)
    • 6.4.1 Progressive Corporation
    • 6.4.2 Allstate Corporation
    • 6.4.3 State Farm Insurance
    • 6.4.4 Liberty Mutual Insurance
    • 6.4.5 Aviva plc
    • 6.4.6 Generali Group
    • 6.4.7 AXA Group
    • 6.4.8 Zurich Insurance Group
    • 6.4.9 Desjardins Insurance
    • 6.4.10 MAPFRE S.A.
    • 6.4.11 Metromile Insurance
    • 6.4.12 Root Insurance
    • 6.4.13 Nationwide Mutual
    • 6.4.14 USAA
    • 6.4.15 Allianz SE
    • 6.4.16 Vodafone Automotive
    • 6.4.17 Octo Telematics
    • 6.4.18 Cambridge Mobile Telematics
    • 6.4.19 Insure The Box (Aioi NTT)
    • 6.4.20 By Miles

7. Market Opportunities & Future Outlook

  • 7.1 White-space & Unmet-Need Assessment
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Global Usage-Based Insurance Market Report Scope

Usage-based insurance (UBI) is auto insurance that uses data collected from the insured vehicle to determine the premium. This report aims to provide a detailed analysis of the usage-based insurance market. It focuses on the market dynamics, emerging trends in the segments and regional markets, and insights into the various product and application types. Also, it analyses the key players and the competitive landscape. The usage-based insurance (UBI) market is segmented by the package, which includes PHYD and PAYD; by technology, including OBD-II, smartphone, black box, and embedded telematics; by vehicle type, including passenger vehicle and commercial vehicle; and by geography, including North America, Europe, Asia-Pacific, South America, and the Middle East. The report offers market size and forecasts for the usage-based insurance markets in terms of revenue (USD) for all the above segments.

By Package Pay-As-You-Drive (PAYD)
Pay-How-You-Drive (PHYD)
Manage-How-You-Drive (MHYD)
By Technology OBD-II Dongle
Smartphone-based
Black-Box/After-market Device
Embedded Telematics (OEM)
By Vehicle Type Passenger Vehicles
Commercial Vehicles
By Geography North America United States
Canada
Mexico
South America Brazil
Peru
Chile
Argentina
Rest of South America
Europe Germany
United Kingdom
France
Italy
Spain
BENELUX (Belgium, Netherlands, and Luxembourg)
Nordics (Sweden, Norway, Denmark, Finland)
Rest of Europe
Asia Pacific China
India
Japan
South Korea
Australia
South East Asia
Indonesia
Rest of Asia
Middle East & Africa United Arab Emirates
Saudi Arabia
South Africa
Nigeria
Rest of Middle East
By Package
Pay-As-You-Drive (PAYD)
Pay-How-You-Drive (PHYD)
Manage-How-You-Drive (MHYD)
By Technology
OBD-II Dongle
Smartphone-based
Black-Box/After-market Device
Embedded Telematics (OEM)
By Vehicle Type
Passenger Vehicles
Commercial Vehicles
By Geography
North America United States
Canada
Mexico
South America Brazil
Peru
Chile
Argentina
Rest of South America
Europe Germany
United Kingdom
France
Italy
Spain
BENELUX (Belgium, Netherlands, and Luxembourg)
Nordics (Sweden, Norway, Denmark, Finland)
Rest of Europe
Asia Pacific China
India
Japan
South Korea
Australia
South East Asia
Indonesia
Rest of Asia
Middle East & Africa United Arab Emirates
Saudi Arabia
South Africa
Nigeria
Rest of Middle East
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Key Questions Answered in the Report

What is the current value of the global usage-based insurance market?

The global usage-based insurance market size is USD 30.31 billion in 2025 and is projected to reach USD 60.91 billion by 2030.

Which region holds the largest share in global usage-based insurance?

Europe leads with a 26.8% market share in 2024, aided by mandatory event-data recorders in all new vehicles.

Which segment is growing fastest within the global usage-based insurance packages?

Manage-How-You-Drive is the fastest-growing package, expected to post a 13.45% CAGR through 2030.

Why are commercial fleets adopting usage-based insurance rapidly?

Telematics delivers 20.1% premium savings and 19% accident-expense reductions, motivating fleets to integrate insurance with existing operational dashboards.

How do privacy regulations affect usage-based insurance programs?

GDPR and CPRA require explicit consent and data minimization, increasing compliance costs and slowing universal program rollouts.

What technologies are replacing traditional OBD-II dongles?

Smartphone telematics and embedded OEM APIs are expanding quickly because they reduce hardware costs and streamline customer onboarding, though data-access fees and sensor variability remain challenges.

Page last updated on: June 30, 2025

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