The global usage-based insurance market for automotive was valued to be USD 21.86 billion in 2017 and is projected to reach USD 95.81 billion by 2025, at a CAGR of 18.95%, during the forecast period. The automotive usage-based insurance industry has evolved along with the automotive industry. The demand for usage-based insurance market is largely influenced by increasing vehicle sales with telematics and connected car services, reduction in insurance as compared to the traditional insurance, and increasing vehicle sales and parc.Increasing vehicle with telematics and connected car services to drive the global usage-based insurance for automotive demand close to USD 96 billion by 2025
The usage-based insurance for automotive is a method to calculate the insurance premium. The amount of insurance premium is decided on the basis of a driving score which is calculated by considering factors such as vehicle usage, location, speeding, braking, cornering, night driving, and distracted driving. Based on the driving score, automotive insurance providers offer a discount on the insurance premium.
Ambiguity over regulations and legislative environments are acting as a restraint for the usage-based insurance market as usage-based insurance providers need to plan new product for different states with in a country.
Furthermore, ongoing new product developments and partnerships by leading companies are likely to propel the growth of usage-based insurance in the untapped markets for the long forecast.
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