Canada is among the fastest-growing markets for usage-based insurance, according to the latest Insurance Telematics in Europe and North America.
"Europe and North America represent two major markets when it comes to insurance telematics programs and active policies, and the front-running national markets include the US, Italy, Germany, Canada and the UK,” the report's authors wrote.
The ninth edition of the study, which was published by Berg Insight and released by Research And Markets, examines how technology-based auto insurance is expected to develop through 2029.
Usage-based insurance, often called UBI, is auto insurance that prices premiums based on how a person drives rather than only on age, location or past claims. It relies on telematics, which is technology that collects driving data through smartphone apps, plug-in devices or built-in vehicle systems.
“Usage-based insurance gains momentum as telematics policies surge in Europe and North America driven by digital transformation and cost-of-living pressures,” the report said.
North America had about 20.2 million active insurance telematics policies at the end of 2024. The report forecast that total would grow to 31.8 million by 2029, equal to a compound annual growth rate of 9.5 percent.
The report's authors found the size of the North American auto market makes telematics adoption significant even at low penetration levels. About 328 million vehicles were in use in North America in 2024, including 311 million passenger cars and light trucks. Motor insurance gross written premiums in the region totaling US$456.7 billion in 2024.
Telematics systems collect data such as speed, braking, acceleration, distance traveled and time of day. Insurers use that data to adjust premiums, reward safer drivers and better measure risk.
“Solutions of this type generally enable automotive insurers to improve pricing mechanisms based on actual driving data, gain better control of claims and differentiate their offerings to current and prospective policyholders,” the report said.
The study found that insurers in North America were moving away from hardware installed in vehicles and toward app-based systems. “In the US, most of the largest insurers in terms of UBI policies have all introduced smartphone-based solutions to supplement or replace the previously used OBD-II dongles,” the report said.
Canadian insurers were included in that shift. “Several US and Canadian insurers have during recent years reassessed and re-launched their telematics programs,” the report said. It added that insurers were also expanding how telematics data is used, including for claims handling and distracted-driving analysis.
The report linked growth in telematics to broader economic pressures. “Both Europe and North America are forecasted to be growth markets for insurance telematics adoption in 2024–2029,” the authors wrote. “Uncertain economic conditions and the cost-of-living crisis in many markets and their effects on the world economy are believed to drive demand for digital insurance business models, including insurance telematics.”
The report also found insurers were also working more closely with vehicle manufacturers and technology companies, pointing to longer-term changes in how auto insurance is priced and delivered.
The findings were based on interviews with 30 insurance executives, technology providers and vehicle manufacturers, along with 58 case studies of insurance telematics programs. It includes country-level forecasts through 2029 and analysis of the insurance telematics value chain across Europe and North America.
