Global Auto Insurance Market to Grow at a CAGR of 8.7% During 2020 –2030

Introduction

A legal agreement between the policyholder and the insurer known as auto insurance safeguards the insured from financial damage in the case of an accident or theft. In exchange for a premium, the insurer guarantees to cover the insured failures following the terms of the policy. Customers are financially protected by auto insurance against physical damage caused by traffic accidents and vehicle theft. In addition, it covers the expenses incurred when an insured vehicle owner causes injuries, deaths, or property damage to another driver, vehicle, or third-party property such as a building, fence, or utility pole. Before operating or maintaining a car on public roads, liability coverage for bodily injury and property damage is typically required in many jurisdictions, despite varying state-by-state auto insurance laws. Given that there are more incidents on the world's roadways, the vehicle insurance market has substantial growth potential.

Market Dynamics

Growing Traffic Incidents and Regulatory Requirements to Drive the Global Auto Insurance Market

The rising demand for auto insurance on accidents such as traffic collisions, physical damage or bodily injury, theft, and fire increases the pressure on insurance companies to invest in and develop such products that have low growth, high coverage, and provide financial security in the form of medical injury or any other damages. Due to the increase in incidents in recent years, including traffic injuries, drunk driving, and distracted driving while speeding, auto insurance has become mandatory. Most car owners rely on auto insurance to safeguard them against potential financial losses, such as injuries to other drivers, passengers, or pedestrians.

In addition, auto insurance includes these coverages, which reimburse the policyholder's beneficiaries in the event of death. Insurance companies have increased the number of coverages in their products to enhance the overall user interface experience and maintain a competitive edge over the next few years. In addition, the federal and state governments made auto insurance mandatory during vehicle registration to protect consumers from unfair price increases in the coming years and to ensure insurance companies' financial stability. This factor increases customer demand for automobile insurance.

The 1988 Motor Vehicle Act mandates that all drivers of motor vehicles carry auto insurance to cover the amounts they have already paid or are legally obligated to pay as compensation for property damage or accidental death to third parties. The Motor Vehicle Act also modified the penalties for failing to have a basic Compulsory Third-Party Policy, which brought many uninsured vehicles onto the insurance market. Therefore, such stringent legal regulations boost auto insurance policies' sales, contributing to global market expansion.

Growing Demand for Auto Insurance Products & Services to Create Global Auto Insurance Market Opportunities

Automobile insurers have a tremendous opportunity to expand their product lines. Companies provide:

• Medical coverage.
• Comprehensive coverage.
• Bodily injury and property damage coverage.
• Liability coverage for third parties.

Consequently, it is anticipated that insurers will have lucrative opportunities to innovate and expand their product offerings by incorporating specific coverages such as a pay-as-you-drive policy. Instead of the average number of miles a person travels in a year, this includes the miles each individual has driven. In addition, because these coverages are offered in combination or bundled packages, it is easy for customers to choose the plans that best meet their requirements. In the coming years, the variety of these factors will be anticipated to present lucrative opportunities for product expansion.

Regional Insights

North America is envisioned to command the market while growing at a CAGR of 7.5%. In North America, the rising discretionary income of the populace fuels the insurance market. The market is anticipated to expand due to technological advancements and ongoing research and development efforts in autonomous vehicles and their safety. An increase in traffic accidents, collisions, injuries, and property damage has also contributed to the growth of auto insurance in this region. In addition, it is anticipated that an increase in auto sales and government mandates requiring all vehicles to be insured will increase demand for auto insurance and propel market growth.

Major corporations such as Allstate and Liberty Mutual are in the area, contributing to the region's growth. These market-leading companies offer cutting-edge coverages such as comprehensive, underinsured motorist, and uninsured motorist coverage, which fuels the market growth. Additionally, the widespread use of automobiles in this region contributes significantly to the expansion of the market. In addition, it is anticipated that introducing strict government regulations regarding automobile safety will stimulate industry growth.

The Asia Pacific will likely hold USD 441 billion, growing at a CAGR of 10.4%. Due to expanding economies, a sizable population, and an increase in middle-class discretionary income, the region has the fastest growth rate. In addition, rising auto sales and disposable income are anticipated to fuel industry expansion. Automobile insurance is required in several other nations, including India. In addition, it is a better way to safeguard one's finances in case of an accident or vehicle damage.

In addition, as the number of wealthy people has increased, so has their purchasing power for necessities such as food and shelter and luxuries such as motorcycles and cars, which has encouraged them to purchase auto insurance to protect their vehicles in particular. Asia's exports and domestic consumption are factors propelling the growth of auto insurance.

Key Highlights

• The global auto insurance market size had a revenue holding of USD 652.5 billion in 2021. It is expected to reach USD 1,383 billion by 2030, growing at a CAGR of 8.7% during the forecast period (2022-2030).
• Based on coverage, the third-party liability coverage section is predicted to grow at a CAGR of 7.57% and hold the largest share.
• Based on the distribution channel, the direct response segment is predicted to advance at a CAGR of 10.2% and hold the largest share.
• Based on the vehicle age, the new vehicle section is predicted to advance at a CAGR of 8.17% and hold the largest share.
• Based on the application, the personal section is predicted to advance at a CAGR of 8.4% and hold the largest market share.
• Based on regional analysis, North America is envisioned to command the market while growing at a CAGR of 7.5%.

Competitive Players

1. Allianz
2. Allstate Insurance Company
3. Admiral Group Plc
4. Berkshire Hathaway Inc.
5. CHINA PACIFIC INSURANCE CO.
6. GEICO
7. People's Insurance Company of China
8. Ping An Insurance (Group) Company of China, Ltd.
9. State Farm Mutual Automobile Insurance
10. Tokio Marine Group

Recent Developments

Recent Developments

• In 2022, Interholding LLC will acquire most of ALLIANZ GROUP's Russian operations.
• In 2022, ALLIANZ GROUP announced that it had signed a strategic collaboration agreement with Voya Financial.

Segmentation

1. By Coverage
   1. Third-Party Liability Coverage
   2. Collision/Comprehensive/ Other Optional Coverage
2. By Distribution Channel
   1. Insurance Agents/Brokers
   2. Direct Response
   3. Banks
   4. Others 
3. By Vehicle Age
   1. New Vehicle
   2. Used Vehicle
4. By Application 
   1. Personal
   2. Commercial