Automotive Insurance Market Research Report- Global Forecast till 2030

Automotive Insurance Market Information By Vehicle Type (Passenger Cars, Light Commercial Vehicles (LCV), and Heavy Commercial Vehicles (HCV)), By Insurance Type (Third-Party, Comprehensive, Third-Party Theft and Fire), and Region (North America, Europe, Asia-Pacific, and the Rest of the World)—Forecast till 2030

ID: MRFR/AM/6323-HCR | February 2023 | Region: Global | 100 Pages         

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Automotive Insurance Market

Automobile insurance can be defined as the contract that exists between vehicle owners and insurance companies.

Segmentation
By Vehicle Type passenger cars light commercial vehicles (LCV) heavy commercial vehicles (HCV)
By Insurance Type third-party comprehensive third-party theft and Fire
Key Players
Companies Profiled   Allstate Insurance Company (US)    RAC Motoring Services (UK)    Progressive Casualty Insurance Company (US)    Clements Worldwide (US)    GEICO (US)    NFU Mutual (UK)    Zhongan Insurance (China)    ABIC Inc. (China)    CPIC (China)    State Farm Mutual Automobile Insurance Company (US)    RSA Insurance Group plc (UK)    Zurich Insurance Group (Switzerland).
Drivers
Market Driving Forces   Rise in on-demand transportation and the shifting of liability to manufacturer    Automotive industry is undoubtedly undergoing significant changes that will help increase asset utilization    change vehicle ownership models    improve vehicle safety Introduction of autonomous technology has made cars increasingly safer
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The automotive insurance market growth is projected to register a CAGR of 21% from 2022 to 2030.


Global Automotive Insurance Market Research Overview (MRFR Insights)


Digital technologies are being adopted in various insurance solutions due to greater awareness among people of different types of auto insurance. The automotive insurance market size is expected to reach approximately USD Significant Value by 2030. Moreover, the demand for car insurance is expected to grow as it covers a wide range of topics, including coverage and loss of property, medical coverage, and liability. Seventy-eight percent of insured drivers buy comprehensive and progressive insurance, according to the National Association of Insurance Commissioners (NAIC).


COVID-19 Impact Analysis


During 2020, the pandemic significantly impacted driving habits. Shelter-in-place orders, work-from-home arrangements, and the closure of countless businesses significantly decreased the average number of miles driven. According to the Federal Highway Administration, the US average number of miles driven decreased by 41%. Since the pandemic caused a sharp decline in vehicles on the road, insurance models have been shown to have shortcomings. Insurers have offered discounts on monthly premiums to compensate for reduced mileage and accident risk, but these discounts don't reflect the magnitude of traffic reduction. In light of the price sensitivity and economic uncertainty caused by the pandemic, more people may switch to mileage-based policies.


Automotive Insurance Market Dynamics


Auto insurance covers the cost of injuries, death, or property damage caused to the driver by the insured owner of the vehicle, as well as damage to property such as pavements, parks, and fences. Additionally, negligence and rash driving contributes to the rise of road accidents, driving up the demand for auto insurance. Several factors are driving the market for vehicle insurance growth, including an increase in accidents, strict government regulations for adopting auto insurance, and an increase in automobile sales worldwide due to a rise in per capita incomes. Furthermore, autonomous vehicles hamper the market for vehicle insurance growth. Moreover, the increased demand for third-party liability coverage in emerging economies and the implementation of new technologies are expected to create lucrative opportunities in the market for vehicle insurance.


Market Key Drivers



  • Savings and safety fuel the demand for vehicle insurance


Rather than relying on a once-a-year relationship based on renewals, insurers can transform customer relationship management with UBI. Insurers can gain new business, increase brand loyalty, and improve customer retention by increasing transparency and controlling costs for drivers. With automotive usage-based insurance, risk can be better assessed, priced into policies, and minimized and optimized. By using aggregate driving data, insurers can refine their risk profiles for customers who don't have automotive usage-based insurance, ensuring they always have margins on their policies and identifying new customers to target. The market is expected to grow due to its advantages, such as increased customer retention, profitability, and streamlined claims processes.


Market Key Restraints:



  • The security and privacy concerns related to automotive usage-based insurance will hold back its adoption


There have been many recent examples of data breaches ly that have raised consumer concerns about data privacy & security. For instance, the 2015 network hack by Premera Blue Cross was undetected for nearly nine months after being discovered. The advanced persistent threat attack exposed more than 10.4 million individuals' protected health information, including their bank account information, social security number, email address, names, and clinical information for their health plans. Due to these factors, the market will be restrained from growing in the future since USD 6.85 million was settled in September 2020 (the second-largest settlement for HIPAA violations).


Market Key Opportunities:



  • Strategies for enhancing growth through innovative marketing


To accelerate industry change, key players are experimenting with several strategies for selling UBI programs to users. Metromile, a pay-per-mile carrier, launched Ride Along in October 2020. Those who want to test whether their rates will change under a UBI plan won't have to change carriers. A rise in innovative marketing strategies will positively influence the adoption of automotive UBI policies after two weeks of driving with the Ride Along with the app.


Automotive Insurance Market Segmentation


Vehicle Type Insights


The automotive insurance market segmentation, based on vehicle type, is passenger cars, light commercial vehicles (LCV), and heavy commercial vehicles (HCV). The insurance market growth was prominently high under the passenger cars insurance category in 2021. UBI is gaining popularity in this segment due to consumers' increased demand for lower insurance premiums, substantial discounts for registration, and low-cost additional services such as theft protection and remote vehicle control. However, light commercial vehicles (LCVs) are expected to grow faster. A major reason for this is the increasing adoption of UBI among fleet owners. With UBI, fleet owners can offer value-added services, resulting in higher profits and lower total costs of ownership. Additionally, fleet owners appreciate the importance of the reputation of drivers. Therefore, receiving feedback regarding their drivers (regarding driving behavior) is a welcome proposition.


Insurance Type Insights


The automotive insurance market segmentation, based on insurance type, is third-party, comprehensive, third-party theft, and fire. In 2021, third-party vehicle insurance accounted for the largest market share of the market. As a result of the availability of such diverse insurance options, market demand has increased. This segment will significantly impact the market during the forecasted period. Collision, comprehensive, and gap insurance are some of the market's most popular auto insurance products.


Global Automotive Insurance Market Share, by Region, 2021 (%)


Automotive Insurance Market Share, by Region, 2021


Automotive Insurance Market Overview, by Region


By region, the market has been divided into North America, Europe, Asia-Pacific, and the Rest of the World. North America accounted for the most extensive market share. Asia-Pacific will exhibit the highest CAGR during the forecast period.


North America


North America dominated the market for vehicle insurance share in 2021. It can be attributed to OEMs in this region collaborating with insurance and telematics technology companies more and more and to mobility-as-a-service being increasingly adopted. From a perspective, the growing number of automobiles may significantly enhance the segment's contribution.


Asia-Pacific


Asia-Pacific will exhibit the highest CAGR in the market for insurance during the forecast period. The reasons for this increase are the proliferation of mobile connectivity and smartphone technology and the growing number of telematics-equipped vehicles in this area. In addition, countries like South Korea and China are experiencing rapid growth in the internet of vehicles market due to their robust telecommunications infrastructure, mobile communication technology, and rapid expansion of the internet of vehicles network.


Automotive Insurance Market Competitive Landscape


The market includes tier-1, tier-2, and local players. The tier-1 and tier-2 players have reach with diverse product portfolios. vehicle insurance companies such as Allstate Insurance Company (US), RAC Motoring Services (UK), Progressive Casualty Insurance Company (US), Clements Worldwide (US), GEICO (US), NFU Mutual (UK), and Zhongan Insurance (China) dominate the market for vehicle insurance due to product differentiation, financial stability, strategic developments, and diversified regional presence. The players are concentrating on supporting research and development. Furthermore, they embrace strategic growth initiatives, such as development, product introduction, joint ventures, and partnerships, to strengthen their market position and capture an extensive customer base.


Prominent players in the automotive insurance market research include Allstate Insurance Company (US), RAC Motoring Services (UK), Progressive Casualty Insurance Company (US), Clements Worldwide (US), GEICO (US), NFU Mutual (UK), and Zhongan Insurance (China), ABIC Inc. (China), CPIC (China), State Farm Mutual Automobile Insurance Company (US), RSA Insurance Group plc (UK), and Zurich Insurance Group (Switzerland), among others.


Scope of the Automotive Insurance Market Report


Vehicle Type Outlook



  • Passenger Cars

  • Light Commercial Vehicles (LCV)

  • Heavy Commercial Vehicles (HCV)


Insurance Type Outlook



  • Third-Party

  • Comprehensive

  • Third-Party Theft and Fire


Region Outlook



  • North America


    • US

    • Canada

    • Mexico


  • Europe


    • UK

    • Germany

    • France

    • Italy

    • Spain

    • Rest of Europe


  • Asia-Pacific


    • China

    • India

    • Japan

    • Australia and New Zealand

    • Rest of Asia-Pacific


  • Rest of the World


    • South America

    • Middle East

    • Africa



Objectives of the Study


The objectives of the study are summarized in 5 stages. They are as mentioned below:


Automotive Insurance Market Forecast & Size:


To identify and estimate the market size for the automotive insurance market report segmented by vehicle type and insurance type by value (in US dollars). Also, to understand the consumption/ demand created by consumers in the automotive insurance market forecast between 2022 and 2030


Market Landscape and Trends:


To identify and infer the drivers, restraints, opportunities, and challenges in the automotive insurance market growth (Profitability, Benchmarking, Volume, Value, Macro-Economic Factors, Y-o-Y Growth Analysis)


Market Influencing Factors:


To find out the factors which are affecting the automotive insurance market size among consumers (Gross Margin, Sales Footprint, Strategy, Channels, Economic Outlook, Growth Projections)


Impact of COVID-19:


To identify and understand the various factors involved in the market affected by the pandemic


Company Profiling:


To provide a detailed insight into the major companies operating in the market. The profiling will include the financial health of the company in the past 2-3 years with segmental and regional revenue breakup, product offering, recent developments, SWOT analysis, and key strategies.


Intended Audience



  • Automotive insurance producers

  • Raw material suppliers

  • Retailers, wholesalers, and distributors

  • Governments, associations, and industrial bodies

  • Investors and traders



Report Scope:

Report Attribute/Metric Details
  Market Size   2030: USD Significant Value
  CAGR   21.00% CAGR (2022-2030)
  Base Year   2021
  Forecast Period   2022 to 2030
  Historical Data   2019 & 2020
  Forecast Units   Value (USD Million)
  Report Coverage   Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
  Segments Covered   Vehicle Type and Insurance Type
  Geographies Covered   North America, Europe, Asia-Pacific, and the Rest of the World (RoW)
  Key Vendors   Allstate Insurance Company (US), RAC Motoring Services (UK), Progressive Casualty Insurance Company (US), Clements Worldwide (US), GEICO (US), NFU Mutual (UK), and Zhongan Insurance (China), ABIC Inc. (China), CPIC (China), State Farm Mutual Automobile Insurance Company (US), RSA Insurance Group plc (UK), and Zurich Insurance Group (Switzerland)
  Key Market Opportunities   Strategies for enhancing growth through innovative marketing
  Key Market Drivers   Strict government regulations for adopting auto insurance


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Frequently Asked Questions (FAQ) :

The  automotive insurance market forecast period is 2022 - 2030

The market is expected to register a CAGR of ~21% over the next 10 years, according to  automotive insurance market research.

Asia-Pacific is expected to register the highest CAGR during 2022 - 2030

North America held the largest share in 2021

The market size is expected to be USD Significant Value by 2030.

Allstate Insurance Company (US), RAC Motoring Services (UK), Progressive Casualty Insurance Company (US), Clements Worldwide (US), GEICO (US), NFU Mutual (UK), and Zhongan Insurance (China), ABIC Inc. (China), CPIC (China), State Farm Mutual Automobile Insurance Company (US), RSA Insurance Group plc (UK), and Zurich Insurance Group (Switzerland), among others are the major companies operating in the market.