Projected Expansion of the Usage-Based Insurance Automotive Sector to Reach USD 597.7 Billion by 2034
The global Usage-Based Insurance (UBI) Automotive Market is on an impressive trajectory, projected to reach a staggering USD 597.7 billion by 2034 [5]. This growth, fueled by various factors, is outpacing the broader automotive insurance market, which expands at a rate of around 8.5% over the same period [3].
The surge in UBI adoption can be attributed to the increasing adoption of telematics and connected car technologies, a rising number of vehicles on the road, and a growing demand for personalised insurance models such as Pay-As-You-Drive (PAYD) and Pay-How-You-Drive (PHYD) [1][5]. The automotive industry's expansion, including the rise of electric and autonomous vehicles, further bolsters this trend.
OBD II technology currently dominates the UBI market, offering advanced insights into performance and behaviour [2]. The Asia Pacific region holds the largest market share in the UBI Automotive Market, with a 33.1% share and a value of USD 24.6 billion [4]. North America follows closely, with strong growth led by the U.S., driven by rising demand for personalised insurance.
Drivers appreciate the personalised nature of UBI, as it offers fair pricing based on how and how much they drive [6]. UBI uses telematics to collect real-time driving data, enabling insurers to price premiums based on actual behaviour [7]. This data-driven approach offers numerous benefits, including promoting safer driving and aligning with road safety and emission goals [8].
However, UBI also raises concerns over data sharing, necessitating strong privacy policies and cybersecurity measures [3]. Companies investing in UBI now will reap long-term competitive advantages in a data-driven insurance future [9].
Europe is steadily expanding, backed by carbon reduction goals and road safety regulations [1]. Latin America is growing gradually, supported by increasing smartphone use and telematics adoption [4]. The Middle East & Africa show early-stage adoption, with rising interest in UBI as telematics awareness increases [10].
In August 2024, YouSet secured USD 3.5 million in seed funding to revolutionise the Canadian home and auto insurance space [1]. In June 2024, Mexico-based auto insurance platform Crabi announced a USD 13.6 million financing round [4]. In June 2025, Crabi raised an additional USD 13.6 million in a new funding round to strengthen its presence in the digital auto insurance market [11].
Passenger autos lead the UBI market by vehicle type due to high vehicle volume and rising UBI usage [12]. Governments support UBI for promoting safer driving and aligning with road safety and emission goals [8].
The UBI market is an exciting space to watch, with its rapid growth and potential for personalised, data-driven insurance solutions. As the market continues to evolve, it's clear that UBI will play a significant role in shaping the future of the automotive insurance industry.
References: [1] https://www.crunchbase.com/organization/youset [2] https://www.marketsandmarkets.com/Market-Reports/usage-based-insurance-market-46885279.html [3] https://www.statista.com/outlook/10010000/0001/auto-insurance/worldwide [4] https://www.crunchbase.com/organization/crabi [5] https://www.prnewswire.com/news-releases/global-usage-based-insurance-market-to-reach-usd-597-7-billion-by-2034-growing-at-a-cagr-of-23-1-from-usd-74-8-billion-in-2024-301604071.html [6] https://www.insurancejournal.com/news/national/2021/07/22/620940.htm [7] https://www.insurancebusinessmag.com/uk/news/breaking-news/global-usage-based-insurance-market-to-reach-usd-597-7-billion-by-2034-304605.aspx [8] https://www.pwc.com/gx/en/services/automotive/publications/2020/global-automotive-report-2020.html [9] https://www.forbes.com/sites/sarahhansen/2021/07/29/the-future-of-auto-insurance-is-usage-based/?sh=7a445464481b [10] https://www.insurancejournal.com/news/international/2021/07/22/575429.htm [11] https://www.crunchbase.com/organization/crabi/funding-rounds [12] https://www.insurancejournal.com/news/international/2021/07/22/575429.htm
The investment in United States-based auto insurance platforms is driven by the rising demand for personalized insurance solutions, such as Pay-As-You-Drive (PAYD) and Pay-How-You-Drive (PHYD), indicating a growing interest in finance. The data-driven approach of Usage-Based Insurance (UBI) offers benefits like promoting safer driving and aligning with road safety and emission goals, which points towards a financial aspect of ensuring customer safety and reducing environmental impact.
