This report summarises Transforma Insights’ view on the Usage Based Insurance (UBI) Application Group found in the Transforma Insights Connected Things IoT forecast. The report covers details on the benefits of UBI, the role of connected telematics devices, potential savings, and market sentiments on the use and need for UBI devices.
Mostly concentrated in developed regions such as North America and Europe, the market for usage-based insurance is typically triggered by the rising cost of insurance premiums, innovation within the local insurance industry, and shifting consumer preferences. Global adoption of UBI is still very fragmented in nature, largely due to the need to develop solutions to suit national markets. Smaller markets lag in UBI adoption due to its high cost to implement. However, the launch of connected cars equipped with OEM-backed software solutions can increase the adoption of UBI, particularly in smaller markets. This could in turn launch new vendors in the market.
The report provides a detailed definition of the sector, analysis of market development and profiles of the key vendors in the space. It also provides a summary of the current status of adoption and Transforma Insights’ ten-year forecasts for the market. The forecasts include analysis of the number of IoT connections by geography, the technologies used (including splits by 2G, 3G, 4G, 5G, LPWA, short range, satellite and others), as well as the revenue split between module, value-added connectivity and services. A full set of forecast data, including country-level forecasts, sector breakdowns and public/private network splits, is available through the IoT Forecast tool.
This section talks about the general benefits of usage-based insurance for vehicle owners (like reduced insurance premiums through changed driving behaviour) as well as for insurance providers (by allowing them to calculate more accurate premiums). The market development section is further categorised into:
This section first charts the benefits of UBI for insurers, like enabling them to supplement traditional rating factors with real-world driving and vehicle-usage data. It also adds that major insurance providers have been working with telematics and usage-based insurance solutions for many years now, which enables insurers to assess policyholders’ driving risk and reduce fraud by analysing data generated during and before an accident.
This section of the report explains how various consumers (like new drivers and those with low annual mileage) benefit from UBI. It claims that cost savings remain the primary driver of consumer interest in UBI, along with its other benefits, like encouraging safer driving by providing continuous feedback on drivers’ behaviour.
This section charts the fragmented national market for UBI and explains the relative weight of each country in this context. For instance, it identifies Italy as one of the most mature UBI markets, accounting for around 18–20% of the global market, primarily driven by the widespread use of black-box devices and a long history of telematics-enabled insurance products. It also maps other important economies in this context, including the UK and the US.
It then explains the reasons behind the limited penetration of usage-based insurance in smaller markets and highlights how the introduction of legislation by governments and regulators can have a significant impact on these national markets. A case in point is the Insurance Regulatory and Development Authority of India, which introduced legislation in 2024 requiring Indian insurance companies to offer pay-as-you-drive insurance policies to all customers.
This section first claims that rising insurance costs are one of the major drivers behind this market. For example, the average cost of comprehensive car insurance reached GBP719 (USD981) in May 2026, down 5% from a year earlier but still considerably higher than the GBP514 (USD701) recorded in Q3 2021. It also adds that higher repair and replacement costs continue to place pressure on both consumers and insurers, which creates an opportunity for UBI, since it can provide an alternative pricing model by linking premiums more closely to individual driving behaviour and vehicle usage, potentially allowing safer and lower-mileage drivers to achieve savings while giving insurers greater insight into risk.
This section first explains the different technology options insurers can use to collect the driving and vehicle data required for UBI, including smartphones, OBD-II devices, black boxes and embedded telematics. It argues that the market is likely to move towards a combination of these data sources, with smartphone-based solutions benefiting from their low cost and flexibility, while embedded telematics is gaining traction as connected vehicles become more widespread.
It then discusses the growing role of OEM-embedded telematics, highlighting how connected vehicles can reduce the need for separate aftermarket devices and enable insurers to use vehicle-generated data for risk-based pricing. The section also explains why aftermarket solutions remain important, particularly for commercial fleets that require standardised telematics across vehicles from different manufacturers. Finally, it highlights the additional services that aftermarket devices can support, such as fleet management and stolen vehicle recovery, which can help spread the costs of hardware and installation across multiple revenue streams.
This section of the report explains how concerns about data privacy, transparency, and accuracy of telematics data have continued to hamper the growth potential of the market. For instance, a global consumer study conducted by IMS in April 2025 found that 62% of UK motorists were concerned about sharing personal location information, while only 32% of consumers globally currently allowed or said they would be comfortable sharing their driving data.
It further adds that as connected vehicles generate increasingly detailed driving data, concerns are growing around how this information is collected, shared and used. Therefore, greater transparency, consent and safeguards for personal data will be critical to maintaining consumer trust and supporting the wider adoption of UBI. It also includes some relevant case studies in this context, like Pouch Insurance adopting OCTO’s telematics for a per-mile commercial insurance product.
The key vendors section lists some of the main providers of products and services related to the usage-based insurance market such as Arity, By Miles, Cambridge Mobile Telematics, IMS, Insure The Box, Octo Telematics, Progressive (Snapshot), Targa Telematics, and The Floow. The report provides profiles of the various vendors including aspects most relevant to this Application Group, such as product offerings, pricing, financial results, and technology.
In the market forecasts section, we provide a summary of the forecasts from the Transforma Insights IoT Forecast Database:
The report charts the growth in the number of devices which will grow from 60 million in 2025 to 187 million in 2035.
Transforma Insights forecasts are compiled on a country-by-country basis. This report includes a regional summary, showing splits between Australasia, Greater China, North America, Europe, Japan, Latin America, MENA, Russia & Central Asia, South East Asia, South Korea, India & South Asia, and Sub-Saharan Africa.
Transforma Insights’ IoT forecasts include splits between the various connectivity technologies as follows: 2G, 3G, 4G, 5G mMTC, 5G non-mMTC, LPWA (non-mMTC), Satellite, Short Range, and Other.
This section discusses which technologies will be used in the usage-based insurance application group.
This part of the report discusses the market growth in terms of revenue (module revenue, service wrap revenue, and VAC revenue). Transforma Insights estimates that the revenue in the Usage-based Insurance Application Group will grow at a CAGR of 15%.
