The usage-based insurance market will rake in $123 billion USD in the next six years, owing largely to growth in Canada and the US, a new report has found.
Thanks to improving telematics systems, the market will grow 36.4% between now and 2022.
While Europe accounted for the largest revenue share in the usage-based insurance market in 2015, in the coming years increased penetration of the services will lead to a surge in demand in North America, an Allied Market Research report revealed.
The popularity of the services among teenagers and young people will drive the demand, it said.
The manage-how-you-drive (MHYD) segment is expected to grow at the fastest rate in the next six years, owing to the fact it provides a higher level of freedom and flexibility to customers.
By technology type, black-boxes accounted for the biggest market share in 2015 – they were deemed highly secure and reliable.
Their increased popularity in the global market was put down to accurate and timely data collection capabilities in the report.
However, smartphone technology is expected to see the fastest growth globally in next few years, driven by its convenience.
Many insurance firms have begun diversifying into the telematics business in order to capitalise on the growing demand in the industry, the report said, citing companies such as Progressive Corporation, Insure The Box, Mapfre S.A., and Metromile as those who have made several partnerships to expand their market and product line.
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