Usage-Based Insurance (UBI), also known as telematics-based insurance, is increasingly being adopted worldwide, according to a new report by Visiongain.
According to the research firm, UBI will account for 33 million policyholders in 2016, a significant increase over the 21.7 million policyholders accounted for in 2015. Over $21.8bn of automotive premiums will be generated by the Usage-Based Insurance market in 2016, per the research.
“Already commonplace in Italy, the United States and the UK, a number of new markets have recently experienced a growth in the adoption of UBI including Japan, South Africa, and Brazil.“
The research firm expects smartphone and hybrid solutions to play an increasingly influential role in the UBI market.
As we already pointed out last year (read here), this report seems to overestimate the current penetration of UBI.
Research firm IHS recently estimated the UBI market at 12 million policyholders in 2015: around 5 million in the United States and 3.6 million in Italy.
Today, Italy is the only country in which UBI has a double digit share of the insurance market, representing 10 percent of the market there in 2015, according to the IHS Automotive report.