Vehicle Insurance Market (By Coverage: Third Party Only, Third Party Fire & Theft Insurance, Comprehensive Insurance; Vehicle Type: By Passenger Cars, Light Commercial Vehicle (LCV), Heavy Commercial Vehicle (HCV)/Trucks & Buses; By Distribution Channel: Insurance Agents/Brokers, Direct Response, Banks, Others; By Application: Personal, Commercial) – Global Industry Analysis, Market Size, Opportunities And Forecast 2020 - 2027

The market for vehicle insurance is projected to grow at a CAGR of around 5.9% from 2020 to 2027 and expected to reach the market value of around US$ 1,096.2 Bn by 2027.

Vehicle Insurance is also termed car insurance, motor insurance, or auto insurance. This encompasses the insurance for cars, trucks, motorcycles, and other road vehicles. The basic reason behind having insurance is financial protection against physical damage or bodily injury resulting from traffic collisions and against liability that could also arise from incidents in a vehicle. This can also cover the protection against the theft of the vehicle and against damage to the vehicle from events keying weather or natural disasters, and damage sustained by colliding with stationary objects. Moreover, the terms and specifications of insurance coverage may differ region by region.

Market Dynamics

The rising number of road accidents across the globe due to increasing traffics and the adoption of careless driving habits, as well as the practice of extra load on heavy vehicles, are supporting the demand for protection against vehicle accidents. The implementation of stringent government regulations for the adoption of auto insurance is supporting the growth of market value. The increasing automobile sales globally due to the surging per capita income of consumers especially in developing economies are further bolstering the market value. The implementation of technologies in existing products and service lines and the rising demand for third-party liability coverage in emerging economies is further expected to propel the market growth. 

On the other hand, the increasing adoption of autonomous vehicles is likely to negatively affect the insurance market over the forecast period from 2020 to 2027. 

Covid-19 impact on the Vehicle Insurance Market

The Covid-19 pandemic has badly affected almost every industry vertical due to the implementation of nationwide lockdowns in most of the economies across the globe. To overcome the several challenges associated with the market operations, insurers have established new developments in existing policies like pay-as-you-drive insurance, usage-based insurance, or telematics insurance that charges a premium based on the usage of the car. Additionally, insurers have adopted advanced technologies to enhance the claim processes and to provide a better user experience. 

Segment Instance of Global Vehicle Insurance Market 

Third-party only segment is having a potential share in the global Vehicle Insurance Market

In 2019, the third party only (TPO) insurance is leading in the market as it is the basic insurance that provides protection if the vehicle operator sued for a physical injury or damage to someone else's property. With this insurance, the insured party can cover financial loss in the event of bodily injury, death, and damage of property to the third party. The Motor Vehicle Act of India imposes consumers to have compulsory third-party liability coverage, in order to protect insured and uninsured people from accidents. According to the Insurance Information Bureau (IIB), only 6.5 to 7 crore vehicles have insurance cover, against around 18 crore registered vehicles on Indian roads. This is another factor projected to create growth over the forecast period. 

Asia Pacific is projected to experience fastest growth over the forecast period from 2020 to 2027

The increasing production and demand of passenger vehicles in the region especially in developing economies including China and India are supporting the regional market growth. The significant rise in demand for vehicles due to the increasing middle-class population and their demand for passenger vehicles are simultaneously increasing is propelling the value. The stringent government regulations for the insurance of vehicles are further bolstering the market value. For instance, the Insurance Regulatory and Development Authority of India (IRDAI) has mandated a 3-year insurance policy for cars and a 5-year policy for motorbikes at the time of sale and registration.

Key Market Player

The players profiled in the report include Admiral Group Plc, Allianz SE, Allstate Insurance Company, Berkshire Hathaway Inc., China Pacific Insurance (Group) Co., Ltd., GEICO, People’s Insurance Company of China, Ping An Insurance (Group) Company of China, Ltd., State Farm Mutual Automobile Insurance Company, and Tokio Marine Group.

Market Segmentation

Market By Coverage

Third-party only
Third-party fire & theft insurance
Comprehensive insurance

Market By Vehicle Type

Passenger Cars
Light Commercial Vehicle (LCV)
Heavy Commercial Vehicle (HCV)/Trucks & Buses

Market By Distribution Channel
Insurance Agents/Brokers
Direct Response
Banks
Others

Market By Application

Personal
Commercial

Market By Geography

North America
•    U.S.
•    Canada

Europe
•    U.K.
•    Germany
•    France
•    Spain
•    Rest of Europe

Asia-Pacific
•    China
•    Japan
•    India
•    Australia
•    South Korea
•    Rest of Asia-Pacific

Latin America
•    Brazil 
•    Mexico
•    Rest of Latin America

Middle East & Africa
•    GCC
•    South Africa
•    Rest of Middle East & Africa