Electric Vehicle (EV) Insurance Market Overview
Electric Vehicle (EV) Insurance Market Size was valued at USD 52.0 billion in 2022. The Electric Vehicle (EV) Insurance market industry is projected to grow from USD 63.3 billion in 2022 to USD 63.3 billion in 2023 and reach USD 372.9 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 21.8% during the forecast period (2023 - 2032). The market growth is attributed to factors such as increasing demand for convenient and eco-friendly transportation options, and global shift towards sustainability and reduced carbon emissions, which in turn is propelling the growth of the market.
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Electric Vehicle (EV) Insurance Market Trends
Growing adoption of electric vehicles (EVs), to drive the Electric Vehicle (EV) Insurance Market
The Electric Vehicle (EV) Insurance Market is being significantly influenced by the surging adoption of electric vehicles. As more consumers embrace EVs, driven by environmental consciousness, government incentives, and technological advancements, the demand for specialized insurance products tailored to the unique needs of electric vehicle owners is experiencing rapid growth. Electric vehicles present distinct coverage needs, such as battery replacement costs and charging infrastructure damage, prompting the development of insurance policies designed to address these specific risks. Moreover, the global shift towards sustainability and reduced carbon emissions is motivating consumers to opt for EVs, creating a substantial market for insurers to cater to eco-conscious drivers. Government regulations, including tax credits and rebates for EV owners, further encourage the transition to electric vehicles and, consequently, the need for EV insurance. As the EV market continues to expand and mature, competition among insurance providers is intensifying, resulting in innovative coverage options and competitive pricing, ultimately propelling the growth of the EV Insurance Market.
Electric Vehicle (EV) Insurance Market Segment Insights:
The Electric Vehicle (EV) Insurance Market is segmented based on its Coverage, Distribution Channel, Vehicle Age, Vehicle Category and EV propulsion.
Electric Vehicle (EV) Insurance Coverage Insights
Based on the Coverage, the market is segmented into First Party Liability Coverage, Third Party Liability Coverage, and Comprehensive Coverage. The Third-Party Liability Coverage segments is expected to grow rapidly, with Third Party Liability Coverage dominating the market with around significant volume share for the forecast period 2023-2032. Third Party Liability Coverage is essential for meeting legal requirements and ensuring financial security in case of accidents. This will further support the dominance of these coverage types over the forecast period.
Electric Vehicle (EV) Insurance Distribution Channel Insights
The Electric Vehicle (EV) Insurance Market segmentation, based on the Distribution Channel is categorized into Insurance Companies, Banks, Insurance Agents/ Brokers, and Others. Among these, Insurance Agents/Brokers are anticipated to register significant growth. This growth can be attributed to several factors, including their role as intermediaries, offering personalized advice and tailored EV insurance solutions to meet the specific needs of customers. Additionally, the expanding EV market creates a demand for expert guidance in navigating insurance options. Insurance Agents/Brokers also contribute to enhancing customer awareness about EV insurance, ensuring that EV owners receive comprehensive coverage while considering factors such as the unique risks associated with electric vehicles, battery-related concerns, and environmental benefits. Their ability to provide a wide range of insurance products and facilitate connections between customers and insurance providers positions Insurance Agents/Brokers as a crucial segment for EV insurance market growth.
Electric Vehicle (EV) Insurance Vehicle Age Insights
The Electric Vehicle (EV) Insurance Market segmentation, based on the Vehicle Age is categorized into New Vehicle and Used Vehicle. Among these, New Vehicle are anticipated to register significant growth. This growth can be attributed to several factors such as new EVs often come with advanced safety features and technologies that make them attractive to consumers. These features may include autonomous driving capabilities, which can result in lower accident rates and, consequently, reduced insurance premiums. Also, new EVs typically have longer warranties and manufacturer support, which can lead to lower repair and maintenance costs, influencing insurance pricing positively. As the EV market continues to expand, manufacturers are offering competitive pricing and financing options for new EVs, making them more accessible to a broader range of consumers. Furthermore, governments in various regions are offering incentives and rebates for new EV purchases, further incentivizing consumers to opt for new electric vehicles. These factors collectively contribute to the anticipated significant growth in the New Vehicle segment of the EV Insurance market.
Electric Vehicle (EV) Insurance Vehicle category Insights
The Electric Vehicle (EV) Insurance Market, based on vehicle category, is divided into Passenger Cars and Commercial Vehicles. Among vehicle categories, the Passenger Cars sub-segment is anticipated for substantial growth during the forecast period from 2023 to 2032. This growth is primarily driven by the increasing adoption of electric passenger vehicles globally. Factors propelling the growth of the Passenger Cars sub-segment include the rising environmental consciousness among consumers, government incentives promoting electric vehicle adoption, and advancements in EV technology. As electric passenger cars become more prevalent on the road, the demand for specialized insurance tailored to their unique needs is expected to surge, further boosting this market segment.
Figure 2: Electric Vehicle (Ev) Insurance Market, By Vehicle Category, 2022 & 2032 (USD Billion)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Electric Vehicle (EV) Insurance EV propulsion Insights.
Based on EV propulsion, The Electric Vehicle (EV) Insurance Market, is categorized into Battery Operated and Hybrid vehicles. Among these propulsion categories, the Battery-Operated sub-segment is projected to witness substantial growth from 2023 to 2032. This growth is attributed to the increasing popularity of pure electric vehicles (EVs) equipped with battery-powered propulsion systems. Factors driving the expansion of the Battery-Operated sub-segment include a growing awareness of environmental sustainability, advancements in battery technology resulting in longer driving ranges, and a widespread push for reducing carbon emissions.
Also, the Hybrid sub-segment within the Global EV Insurance Market is also anticipated to experience notable growth during the forecast period. Hybrids combine both internal combustion engines and electric propulsion. The growth of the Hybrid sub-segment can be attributed to a gradual transition phase where consumers are gradually shifting towards fully electric vehicles. Hybrid vehicles provide a bridge between traditional gasoline-powered cars and pure electric vehicles, making them an attractive choice for many. As this transitional period continues more hybrid vehicles are anticipated to be on the roads, Thus the demand for insurance coverage is expected to increase, contributing to the growth of this market segment.
Electric Vehicle (EV) Insurance Regional Insights
By Region, the study segments the market into North America, Europe, Asia-Pacific and Rest of the World. The Electric Vehicle (EV) insurance market is growing rapidly, with the Asia Pacific region expected to dominate the market during the forecast period. Asia-Pacific Electric Vehicle (EV) Insurance market accounted for USD 17.4 billion in 2022 and is expected to exhibit an significant CAGR growth during the study period. The region's rapid electrification of passenger and commercial transport, particularly in China, Japan, South Korea, and India, is likely to elevate market growth. The Chinese government's initiatives to limit conventional car sales, coupled with the developing EV infrastructure and connectivity, are accelerating EV sales in the region, further propelling the demand for EV insurance. The rising penetration of EVs in developing economies of APAC, such as India, is also anticipated to boost the demand for this type of insurance in the coming years.
Further, the major countries studied are: The U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.
Figure 3: Electric Vehicle (Ev) Insurance Market Share By Region 2022 (%)
Source: Secondary Research, Primary Research, MRFR Database and Analyst Review
Among these regions, Europe is anticipated to hold a prominent market share in the Electric Vehicle (EV) Insurance market. The Electric Vehicle (EV) insurance market is expected to grow significantly in Europe due to the increasing number of stringent emission norms enforced by the European Union and favorable regulatory policies in the region, such as incentives and subsidies on EV purchases. In 2022, Europe had the second-highest EV sales after China, with nearly 2.3 million units of EVs sold. North America has significant penetration of EV insurance, and the rising adoption of UBI in the region offered by leading companies such as Tesla is likely to boost the EV insurance market growth in the region. The rest of the world, including South America and the Middle East & Africa, is expected to witness significant growth due to increasing penetration of EVs in Brazil, Argentina, and others.
Electric Vehicle (EV) Insurance Key Market Players & Competitive Insights
Major market players are spending a lot of money on R&D to increase their service lines, which will help the Electric Vehicle (EV) Insurance market grow even more. Market participants are also taking a range of strategic initiatives to grow their worldwide footprint, including new policy launches, contractual agreements, mergers and acquisitions, increased investments, and collaboration with other organizations. Competitors in the Electric Vehicle (EV) Insurance industry must offer cost-effective and user-friendly Electric Vehicle (EV) Insurance to expand and survive in an increasingly competitive and rising market environment. The key market players in the EV insurance market include Allianz SE, AXA SA, Berkshire Hathaway Inc., Chubb Limited, ACKO General Insurance Limited, Allstate Insurance Company, Bajaj Allianz General Insurance Company, Beinsure Digital Media, Esure, HDFC ERGO, Lemonade, Inc., and Progressive Casualty Insurance Company and others.
One of the primary business strategies adopted by market players in the global Electric Vehicle (EV) Insurance industry to adopt partnerships and collaborations with E-vehicle market players. The market players have been collaborating to expand their service portfolio in Electric Vehicle (EV) Insurance segment. For instance, in June 2023, Electric car manufacturer Fisker has collaborated with Swiss insurance company Helvetia and insurtech Qover to improve the insurance-buying experience for car owners. Fisker operate in Austria, Denmark, France and Germany, and will now have access to a new solution tailored specifically for their EVs, which will give them access to personalised coverage. When they place a new order, they will be able to track the delivery status of their vehicle and prepare for its arrival – including obtaining insurance.
Key Companies in the Electric Vehicle (EV) Insurance market includes.
- Progressive Casualty Insurance Company
- Esure Group plc
- Lemonade, Inc.
- Bajaj Allianz General Insurance Company
- Allstate Insurance Company
- Beinsure Digital Media
- HDFC ERGO
- Aviva plc
- China Pacific
- ACKO General Insurance Limited
- Allianz SE
- State Farm
Electric Vehicle (EV) Insurance Market Developments
in April 2023, January 2023, Chinese electric vehicle (EV) giant BYD announced that it is working on a potential acquisition of Yi'an P&C Insurance Co.
September 2022, Singlife with Aviva, has started providing cover for electric vehicles (EVs) as part of its car insurance policies, offering special discounts to EV owners. Singlife becomes one of the few local providers of EV insurance solutions as Singapore grows its EV ecosystem and gears towards a sustainable land transport hub. Singlife will provide a 10 per cent Go Green discount on Singlife Car Insurance for EV owners. Singlife will also provide EV-specific peripheral services such as sourcing replacement EVs in the event of an accident and breakdown assistance due to insufficient battery power. Charging cables, batteries and private charging stations will also be insurable for accidental damage in Singlife’s comprehensive coverage, providing EV owners with greater peace of mind. Singlife Car Insurance currently covers most classes of EVs available for sale in Singapore.
Electric Vehicle (EV) Insurance Market Segmentation
Electric Vehicle (EV) Insurance Coverage Outlook
- First Party Liability Coverage
- Third Party Liability Coverage
- Comprehensive Coverage
Electric Vehicle (EV) Insurance Distribution Channel Outlook
- Insurance Companies
- Insurance Agents/ Brokers
Electric Vehicle (EV) Insurance Vehicle Age Outlook
Electric Vehicle (EV) Insurance Vehicle Category Outlook
- Passenger Cars
- Commercial Vehicles
Electric Vehicle (EV) Insurance EV propulsion Outlook
Electric Vehicle (EV) Insurance Regional Outlook
- North America
- Rest of Europe
- South Korea
- Rest of Asia-Pacific
- Rest of the World
- Middle East
- South America
|Market Size 2022
||USD 52.0 billion
|Market Size 2023
||USD 63.3 billion
|Market Size 2032
||USD 372.9 billion
|Compound Annual Growth Rate (CAGR)
||2019 & 2021
||Value (USD Billion)
||Revenue Forecast, Competitive Landscape, Growth Factors, and Trends
||Coverage, Distribution Channel, Vehicle Age, Vehicle Category, EV propulsion and Region
||North America, Europe, Asia Pacific, and Rest of the World
||The U.S, Canada, Germany, France, UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil
|Key Companies Profiled
||Progressive Casualty Insurance Company, Esure Group plc, Lemonade, Inc., Bajaj Allianz General Insurance Company, AXA, Allstate Insurance Company, Beinsure Digital Media, HDFC ERGO, AIG and other market players
|Key Market Opportunities
||Growing adoption of electric Vehicle (EV)
|Key Market Dynamics
||Increasing demand for convenient and eco-friendly transportation options
Frequently Asked Questions (FAQ) :
The Electric Vehicle (EV) Insurance market was valued at USD 52.0 billion in 2022.
The Asia-pacific Electric Vehicle (EV) Insurance market was valued at 17.4 billion in 2022.
The electric vehicle insurance market is anticipated to register a CAGR of 21.8% for the forecast period (2023-2032).
Asia-Pacific region held the largest market share.
Progressive Casualty Insurance Company, Esure Group plc, Lemonade, Inc., Bajaj Allianz General Insurance Company, AXA, Allstate Insurance Company, Beinsure Digital Media, HDFC ERGO are some of the key players in the electric vehicle insurance market.
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