Usage-Based Insurance Market size to Reach USD 69.18 Billion by 2031, Driven by Connected Car Data and Telematics-Based Pricing Trends- Mordor Intelligence

Usage-Based Insurance Market Overview  

According to Mordor Intelligence, the usage-based insurance market size was valued at USD 34.79 billion in 2026, reaching USD 69.18 billion by 2031, registering a CAGR of 14.76% during the forecast period. The rising integration of telematics, connected vehicles, and behavioural analytics is redefining how insurers calculate risk and premiums. 

The global usage-based insurance market industry is witnessing strong demand as insurers shift from traditional static pricing models to real-time, data-backed underwriting. Increasing adoption of connected-car platforms, fleet telematics systems, and smartphone-based monitoring is expanding the usage-based insurance market size across both passenger and commercial vehicle segments. As regulatory bodies recognize telematics as part of core infrastructure, insurers are recalibrating actuarial models to reflect driving behaviour rather than historical averages. 

Key Usage-Based Insurance Market Trends Shaping the Industry 

Connected-Car Platforms Expanding Data Access 

Automakers are increasingly integrating embedded telematics into vehicles, enabling insurers to access high-quality driving data directly from OEM systems. This development is a major contributor to usage-based insurance market trends, as factory-fitted connectivity reduces reliance on aftermarket hardware. 

Growing Appeal Among Younger and Cost-Conscious Drivers 

Smartphone-based telematics reduces installation barriers and supports app-driven engagement tools. This consumer shift supports both usage-based insurance market size expansion and broader digital transformation across the insurance industry. 

Fleet Integration Strengthening Commercial Adoption 

By integrating pay-per-mile and behavioural scoring models, insurers help fleet operators manage costs and reduce accident frequency. This reinforces commercial vehicles as a key driver of usage-based insurance market growth. 

Embedded Insurance in Mobility Platforms 

Such models align with digital-first consumer behaviour and create new distribution channels, strengthening the usage-based insurance market forecast across Asia-Pacific and other mobility-driven regions. 

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Usage-Based Insurance Market Segmentation Analysis 

By Package 

• Pay-As-You-Drive (PAYD) 
• Pay-How-You-Drive (PHYD) 
• Manage-How-You-Drive (MHYD) 

By Technology 

• OBD-II Dongle 
• Smartphone-Based 
• Black-Box / After-market Device 
• Embedded Telematics (OEM) 

By Vehicle Type 

• Passenger Vehicles 
• Commercial Vehicles 

By Geography 

• North America 
• South America 
• Europe 
• Asia-Pacific 
• Middle East & Africa 

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Key Players in the Usage-Based Insurance Market 

• Progressive Corporation 
• Allstate Corporation 
• State Farm Insurance 
• Liberty Mutual Insurance 
• Aviva plc 

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Conclusion 

The usage-based insurance market is transitioning from optional telematics programs to integrated behavioral underwriting frameworks. Connected vehicles, fleet platforms, and embedded mobility coverage are strengthening the role of real-time data within the insurance market. 

While privacy regulations and technology standardization remain important considerations, insurers are adapting through diversified data architectures and transparent consent models. The usage-based insurance market industry is steadily advancing toward personalized pricing, improved risk calibration, and enhanced policyholder engagement. 

For more insights on the usage-based insurance market, please visit the Mordor Intelligence page: https://www.mordorintelligence.com/industry-reports/usage-based-insurance-market?utm_source=industrytoday.co.uk 

Industry Related Reports: 

Netherlands Property and Casualty Insurance Market 

The Netherlands property and casualty insurance market was valued at USD 77.49 billion in 2025 and is projected to grow from USD 81.7 billion in 2026 to USD 106.48 billion by 2031, registering a CAGR of 5.44% during 2026–2031. Growth is supported by stable demand for auto and homeowner policies, rising commercial risk coverage, regulatory alignment, and expanding distribution through direct and bancassurance channels. 

MENA Health & Medical Insurance Market Size 

The MENA health and medical insurance market is expected to grow from USD 18.93 billion in 2025 to USD 20.18 billion in 2026 and reach USD 27.79 billion by 2031, at a CAGR of 6.61% over 2026–2031. Expansion is driven by mandatory health insurance reforms in GCC countries, rising healthcare costs, growing SME coverage, and increased adoption of private medical insurance across the region. 

Global Specialty Insurance Market Share 

The specialty insurance market was valued at USD 134.6 billion in 2025 and is estimated to increase from USD 147.76 billion in 2026 to USD 235.44 billion by 2031, growing at a CAGR of 9.77% during 2026–2031. Market growth is fuelled by increasing demand for marine, aviation, political risk, and entertainment coverage, rising complex corporate exposures, and broader adoption of embedded and direct-to-consumer distribution models. 

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