Asia-Pacific usage-based insurance to grow 18.6%

The global market was estimated at $32.6b in 2025.

Asia-Pacific (APAC) is set to become the primary driver of global growth in the usage-based insurance (UBI) market, expanding at a projected compound annual growth rate (CAGR) of 18.6% through to 2035. 

According to Market Research Future, the global market for usage-based insurance — which calculates car insurance premiums using real-time driving data, mileage, and behaviour rather than traditional factors like age and postcode — reached an estimated $32.6b globally in 2025. 

APAC’s expansion is outpacing all other global regions, supported by rising vehicle ownership in China and India, digital-insurance mandates, and the widespread use of smartphone telematics that removes the need for costly aftermarket hardware.

The global market is projected to rise from $37.3b in 2026 to $116.7b by 2035, growing at a CAGR  of 13.5%.

Dynamic long-term growth across the APAC is being led by regulatory sandbox pilot programs from India's insurance regulator IRDAI, the expansion of China's connected-vehicle ecosystem, and the integration of embedded insurance within Southeast Asian ride-hailing platforms.

This shift marks a broader global transition from paper-based, annual-renewal underwriting to real-time data streams from smartphone sensors, onboard diagnostics (OBD-II) dongles, and factory-integrated telematics. 

Insurers invested over $4.7b into telematics infrastructure between 2023 and 2024 to fund cloud-based behavioural scoring engines and vehicle manufacturer data partnerships. 

Furthermore, insurer investment in machine-learning pricing engines rose by an estimated 38% year-over-year in 2024. Early adopters using these advanced risk scores reported a five to eight percentage point reduction in their loss ratios.

Whilst APAC leads in growth speed, Europe remains the largest regional market, holding a 28.5% share in 2025. 

European market dominance is sustained by Italy’s mandatory black-box regulations for high-risk drivers, Germany’s fleet telematics adoption, and the UK’s mature market for under-25 drivers. 

Regulatory momentum is expected to continue with a European Commission proposal requiring vehicle manufacturers to share real-time driving data through open APIs by 2027.

North America stands as the second-largest regional market and the primary technology innovation hub. 

High domestic car insurance premium inflation, paired with a $520m investment from the US National Highway Traffic Safety Administration into vehicle-to-everything (V2X) communication corridors, has made the region the highest-spending deployment environment per policy.

Emerging growth frontiers are also developing in South America and the Middle East. 

Rising premium inflation in Brazil and Mexico is driving commercial fleet telematics demand, whilst Gulf Cooperation Council insurers are increasing investments in telematics infrastructure to combat claims fraud.