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Usage-based Insurance Market to Nearly Double This Year, Report Says

The usage-based insurance (UBI) concept is continuing to become more popular, with a new report indicating that, by the end of this year, more than 20 million people will be UBI policyholders.

The report, which is called the “Automotive Usage-Based Insurance (UBI) Market Report 2015-2025: Insurance Telematics and the Connected Car,” comes from VisionGain, a London, England-based market research firm.

Specifically, the 228-page report (which features more than 200 tables and figures) says the UBI market will grow to 21.7 million policyholders this year, up substantially from the roughly 12.2 million policyholders accounted for in 2014.

Usage-based insurance “will increase rapidly over the next ten years, as consumer awareness is boosted by the rapidly forming synergies and partnership between telematics service providers, insurers and automotive OEMs,” the report’s author recently said.

“An increasingly diverse UBI market will be seen over coming years, with smartphone and hybrid solutions playing an increasingly influential role.”

VisionGain says the key to UBI’s growth – beyond the advancement of mobile and hybrid platforms – will be expansion into new markets, like Japan, South Africa, and Brazil. Usage-based insurance already has a foothold in countries like Canada, the United States, and Britain.

“In many countries across the world, UBI will be used as an effective method of breaking against established players within the global motor insurance market,” VisionGain said.

“It will be a substantial recruitment tool with the potential to win profitable customers, as we forecast that over US$60 billion of automotive premiums will be generated by the usage-based insurance market by 2020.”

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