Introduction
The usage-based insurance (UBI) market is rapidly maturing as insurers shift from static premium models to data-driven pricing tied to actual vehicle use and driving behaviour. According to Stratview Research, the Usage-Based Insurance (UBI) market size was valued at US$ 43.38 billion in 2023 and is projected to grow at a robust CAGR of 7.2% during the forecast period to reach US$ 70.46 billion by 2030. UBI adapts premiums using telematics — from simple mileage measures to advanced behaviour-based scoring — enabling fairer pricing and closer alignment between risk and cost for both internal combustion engine (ICE) and electric vehicles (EVs).

Applications
UBI products include Pay-As-You-Drive (PAYD), Pay-How-You-Drive (PHYD), and Manage-How-You-Drive (MHYD) policies. Deployment models span smartphone apps, OBD-II dongles, and OEM-embedded telematics. For ICE fleets, PAYD can reduce premiums for low-mileage users; for EVs, PHYD and EV-specific metrics (energy consumption patterns, charging locations, regenerative braking profiles) are increasingly relevant for assessing real risk and usage patterns.

Key Drivers
Three forces underpin UBI growth: expanding telematics penetration, regulatory push for usage transparency, and rising consumer appetite for personalised insurance. EV adoption is a notable catalyst — insurers see EVs generating rich telematics signals (battery health, charging behaviour) that allow refined underwriting. Furthermore, insurers gain loss-ratio control through behaviour-based coaching (MHYD), reducing accidents and claims frequency.

To get a free sample, click here: https://www.stratviewresearch.com/Request-Sample/4475/User-Based-Insurance-Market.html#form

Future Opportunities
High-growth opportunities exist in EV-tailored products, PHYD policies, and fleet telematics for commercial mobility. Regionally, North America currently leads in market share due to early telematics adoption, while Asia-Pacific is the fastest-growing market as vehicle electrification and digital insurance models scale. Value-add services (driver coaching, green discounts for efficient EV use) and insurer-OEM partnerships will expand uptake.

Conclusion
UBI is transitioning from a niche offering to mainstream auto insurance for ICE and EVs alike. Insurers that combine precise telematics, EV-aware underwriting models, privacy-conscious data handling, and attractive consumer experiences will capture the greatest share as the market evolves toward personalised, usage-aligned insurance.