The vehicle insurance market provides coverage against losses and accidents related to vehicles such as cars, trucks, buses, motorbikes and commercial vehicles. Vehicle insurance offers financial protection to owners of vehicles in the events such as theft, collision, property damage and personal injury. It is considered mandatory in many countries for reasons including protecting third parties in case of an accident. The growth in vehicle population has significantly fueled the demand for vehicle insurance policies over the years.
The global vehicle insurance market is estimated to be valued at US$ 1,729.64 Bn in 2024 and is expected to exhibit a CAGR of 8.2% over the forecast period 2024 to 2031.
The market is experiencing steady growth owing to factors like rise in vehicle fleet, increasing road accidents and awareness about vehicle insurance among customers. However, factors like growing adoption of self-driving vehicles may threaten the growth of this market in coming years.
Key Takeaways
Key players operating in the vehicle insurance market are People’s Insurance Company of China, Allstate Insurance Company, China Pacific Insurance Co., Allianz, State Farm Mutual, Tokio Marine Group, Automobile Insurance, Geico, Ping An Insurance (Group) Company of China, Ltd., Admiral Group Plc, Berkshire Hathaway Inc., State Farm, Ping An Insurance, Zurich AG, AXA SA, Assicurazioni Generali, GEICO, Bajaj Finserv. Key players are focusing on expansion in new geographies and adopting new technologies to provide innovative products to customers.
The increasing vehicle sales globally due to growing disposable incomes and ease of financing presents lucrative growth opportunities for players in this market. The industry is expected to witness substantial investments for expansion into emerging economies which provides huge untapped potential. Strong economic growth and rising population are driving the demand in Asia Pacific region specifically in China and India.
Market drivers:
- Growing vehicle fleet globally due to increasing disposable income is fueling the demand for vehicle insurance. According FMI report, the global passenger car fleet size is anticipated to grow at 7% CAGR during 2021-2031.
- Strict government regulations and policies mandating vehicle insurance ownership in many countries is positively impacting the market growth.
Market restraints:
- High premium rates of insurance due to rising claim costs threaten the growth of vehicle insurance market.
- Increasing adoption of shared mobility services and self-driving vehicles may reduce the sale of private vehicles, thereby restricting the demand for vehicle insurance policies.
Segment Analysis
Commercial Insurance segment accounts for more than 50% share of the global Vehicle Insurance Market Size . This is because commercial vehicles like trucks, buses, and cabs require mandatory commercial insurance policies. The subsequent personal insurance segment is also significant due to rising personal vehicle ownership globally. However, the commercial insurance segment dominates owing to strict regulatory norms regarding insurance of commercial fleets across countries.
Global Analysis
The Asia Pacific region is the fastest growing as well as the dominating regional market for vehicle insurance. Countries like China, India, Japan, and South Korea have large vehicle parc and growing middle-class populations favoring vehicle ownership. Stringent regulatory norms mandating minimum liability coverage for vehicles in these countries are also propelling the demand. Besides, improving economic conditions enable consumers to spend more on insurance products. North America and Europe are other major regional markets due to high vehicle ownership and developed insurance industry.
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