The worldwide market for usage-bsaed insurance is expected to hit $123 billion in 2022, according to a new report by Allied Market Research.

Though European programs currently generate the most revenue, Allied says that North American programs are expected to grow at a faster rate in the next several years. Growth is expected to be highest in the manage-how-you-drive segment, which incorporates driver feedback to drive better results.

"Consistent improvements in telematics based data collection and analysis techniques have led to the growth of usage-based insurance market. Insurance companies are diversifying into the business segment in order to capitalize upon the upcoming business opportunity," says Sheetanshu Upadhayay, research analyst for Allied.

Though companies tend to prefer "black-box" programs today, because of the quality of the data, smartphone-based or hybrid approaches are expected to contribute to the boom in UBI over the next few years, according to Allied.

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