Market Insights Financial Insurances Non-life insurances

Motor Vehicle Insurance - Worldwide

Worldwide

The Motor Vehicle Insurance market market worldwide is expected to witness significant growth in the coming years.
According to projections, the market size, measured by gross written premium, is estimated to reach a staggering US$1.96tn by 2024.
This indicates a substantial market potential for insurers operating in this segment.
In terms of average spending per capita, individuals are anticipated to spend approximately US$253.20 on Motor Vehicle Insurance market in 2024.
This figure highlights the financial commitment people are willing to make to protect their vehicles against potential risks and accidents.
Furthermore, the market is predicted to experience a steady annual growth rate, with a compound annual growth rate (CAGR) of 2.34% between 2024 and 2028.
This growth trajectory is expected to drive the market volume to reach an impressive US$2.15tn by 2028.
When comparing the global market, it is noteworthy that the United States is expected to generate the highest gross written premium.
The projected figure for 2024 is a whopping US$1,338.0bn, indicating the significant size and importance of the Motor Vehicle Insurance market market the United States.
Overall, the Motor Vehicle Insurance market market is poised for substantial growth worldwide, with the United States leading the way in terms of gross written premium.
This market segment presents promising opportunities for insurers to expand their operations and cater to the evolving needs of vehicle owners.
Despite the global economic downturn, the demand for motor vehicle insurance in countries with a high population density like India continues to rise due to increased vehicle ownership and traffic congestion.

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Analyst Opinion

The motor vehicle insurance market serves as a vital safeguard for vehicle owners, protecting against various risks and liabilities. In this dynamic sector, several discernible trends are shaping the landscape of motor vehicle insurance, while specific indicators offer insights into its performance and stability.

Trends on the market:

Usage-Based Insurance (UBI): Usage-based insurance programs, which track driving behavior through telematics, are gaining popularity. They allow policyholders to pay premiums based on their actual driving habits, promoting safe driving.
Claims Automation: Insurers are streamlining the claims process through automation, reducing claims processing times and enhancing the overall customer experience.
Sustainable and Electric Vehicle Coverage: The market is adapting to the growing popularity of electric vehicles and the demand for sustainable insurance options that cover green vehicle technology.
Advanced Driver Assistance Systems (ADAS): Motor vehicle insurers are actively considering the impact of ADAS on accident frequency and severity, influencing underwriting and pricing.
Eco-Friendly Practices: Many insurers are adopting eco-friendly practices by offering paperless policies, encouraging policyholders to reduce their carbon footprint.

Underlying Indicators:

Accident Frequency and Severity: Tracking accident frequency and severity is pivotal for assessing the financial health of motor vehicle insurers. Changes in these indicators can signal emerging risks or shifts in market dynamics.
Safety Technologies: The adoption of advanced safety technologies in vehicles, such as ADAS and autonomous driving systems, can impact the frequency and severity of accidents, influencing claims costs and underwriting.
Regulatory Compliance: Staying compliant with evolving traffic and safety regulations is essential for motor vehicle insurers to operate within legal boundaries and adapt to changing road safety standards.
Customer Satisfaction and Loyalty: Customer satisfaction and loyalty metrics are key in evaluating the competitiveness of motor vehicle insurance products and the effectiveness of customer service efforts.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on gross written premium, gross written premium per capita, gross claim payments, loss ratio, and distribution channels.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market layer. As a basis for evaluating markets, we use industry associations, national statistic offices, and international organizations, such as OECD. Next we use relevant key market indicators and data from country-specific associations such as insurance consumer spending, gross domestic product, insurance - consumer price index (CPI), population growth. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing and HOLT-linear. The main drivers are insurance consumer spending and insurance - consumer price index (CPI).

Additional Notes:

The market is updated twice per year in case market dynamics change. The impact of the COVID-19 pandemic is considered at a country-specific level.