Usage-based insurance refers to a type of vehicle insurance that leverages in-vehicle communication systems to track vehicle mileage and monitor driving behavior. Thus, the burgeoning sales of telematics-equipped automobiles and mounting demand for connected car services will strengthen the usage-based insurance market in the years to come. The escalating demand for connected cars can be attributed to the mounting customer focus on vehicle and passenger safety and the growing need to stay connected to the outside world.
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| Usage-Based Insurance Market Outlook |
Additionally, the increasing penetration of smartphones integrated with vehicle connectivity systems will create a huge requirement for usage-based insurance. Nowadays, insurance companies are focusing on usage-based policies to improve profitability, as the data collected through connectivity solutions can be used to calculate the insurance premiums to be paid by vehicle owners. Thus, the rising acceptance of in-car connectivity technologies and increasing willingness of customers to share their driving statistics to get personalized insurance quotes will fuel the adoption of usage-based insurance packages in the foreseeable future.
