The global UBI market is projected to grow at an annual rate of almost 30% in coming years, according to Acumen Research and Consulting. The India-based market intelligence company expects the market to reach a value of around $190 billion by 2026.
That’s a big change from today’s niche market and it shows how new connected-car technologies provide a major new business opportunity for insurance companies and telematics service providers.
UBI or pay-as-you-drive (PAYD) lets insurance companies monitor the driving behavior of their customers. The information can be used to lower insurance premiums for certain low-risk drivers, or provide incentives for good on-road behavior to others. The technology can also provide more information on the presence and use of on-board assistance systems, thereby making it easier for insurers to accurately determine risk and set appropriate premiums.