Vehicle Insurance Market Size to Surpass US$ 1593.87 Bn 2032

The global vehicle insurance market size was valued at USD 852.53 billion in 2023 and it is expected to reach USD 1593.87 billion by 2032 with a CAGR of 7.20% from 2023 to 2032.

Table of Contents

Key Takeaways

North America led the global market with the highest market share in 2022.
Asia Pacific region is estimated to expand the fastest CAGR between 2023 and 2032.
By Coverage, the third party liability segment has held the largest market share of 69% in 2022.
By Application, the personal vehicle segment captured the biggest revenue share in 2022.

The rising demand for the vehicles for transportation across the globe is expected to boost the growth of the global vehicle insurance market. The rising disposable income, improved living standards, growing penetration of various vehicle types and brands, rising affordability of the consumers, and rising economic activities are some of the most prominent factors that are boosting the demand for the vehicles and hence the demand for the vehicle insurance is expected to significantly during the forecast period. The vehicle insurances offer financial protection against any damage to the vehicle or damage to a third party. The rising penetration of the top vehicle insurance providers and rising consumer awareness regarding the benefits of vehicle insurance is boosting the growth of the global vehicle insurance market.

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Moreover, the government mandates over the necessity of vehicle insurances is further boosting the demand for the vehicle insurances. The rising popularity of the online insurance aggregators is positively contributing towards the growth of the global vehicle insurance market. Furthermore, the rising government initiatives to promote the adoption of the latest electric vehicles is augmenting the demand for the EVs across the globe, which is expected to be one of the most important drivers of the vehicle insurance market during the forecast period.

Report Highlights

Based on the coverage, the comprehensive coverage is expected to be the fastest-growing segment. It not only covers the damages or loss to the third-party but also provides financial assistance to the policy holder in case of his/her vehicle damage. This is a major advantage of the comprehensive coverage over its third party coverage counterpart. This is expected to boost its demand in the forthcoming years.
Based on application, the personal vehicle segment dominated the market. The rising demand for the personal vehicles across the globe and huge adoption of the vehicle insurance policies has led to the growth of this segment. The increased consumer awareness regarding the benefits of the vehicle insurance has led to the growth of this segment.

Regional Snapshot

North America was the leading vehicle insurance market in 2021. The high demand for vehicles among the consumers owing to the improved living standards, higher affordability, and high demand for luxurious products is a major factor behind the increased demands for the vehicle insurance. The rising sales of the electric vehicles is expected to foster the demand for the vehicle insurance policies during the forecast period. The presence of several top insurance providers in the region has great contributions in the growth of the market. The growing adoption of online channels for buying vehicle insurances is boosting the growth of the North America vehicle insurance market.

Asia Pacific is expected to witness the highest CAGR during the forecast period. The demand for the vehicle insurance is expected to rise owing to the rising cases of road traffic accidents. According to the World Health Organization, about 93% of the road accidents occur in low and middle income countries. The huge demand for the electric vehicles in China and the regulatory mandates of having vehicle insurance in India are the most prominent drivers of the Asia Pacific vehicle insurance market.

Vehicle Insurance Market Scope

Report Coverage	Details
Growth Rate from 2023 to 2032	CAGR of 7.20%
Market Size in 2023	USD 852.53 Billion
Market Size by 2032	USD 1593.87 Billion
Largest Market	North America
Fastest Growing Region	Asia Pacific
Base Year	2022
Forecast Period	2023 to 2032
Segments Covered	Coverage, Application, Distribution Channel, Vehicle Type, Geography

Market Dynamics

Driver

Growing demand for the electric vehicles

The rising concerns over greenhouse gas, climate change, and controlling carbon footprint has forced the government to encourage the adoption of the eco-friendlier transport solutions across the globe. The rising consumer awareness regarding the benefits of electric vehicles on the environment is boosting the demand for the electric vehicles, which is expected to bolster the demand for the vehicle insurance during the forecast period. Countries like Canada, Thailand, Japan, and India are offering subsidies to the consumers for buying EVs.

Restraint

Low penetration of vehicle insurance

There is a very low penetration of vehicle insurance policies in several developing economies. Accordingto the Insurance Information Bureau (IIB), around 6.5 to 7 crore vehicles have insurance coverage against 18 crore registered vehicles in India. Therefore, the low adoption of vehicle insurance is expected to restrain the market growth during the forecast period.

Opportunity

Growing adoption of online channels to buy insurance

With the advent of the digital technologies, the emergence of online insurance aggregators like Policybazaar has gained a rapid traction among the consumers. The online channels are a popular medium of buying and renewing vehicle insurance policies in the developed economies and it is an emerging trend in the developing economies. This is expected to offer lucrative growth opportunities to the market players in the forthcoming future.

Challenge

Hassles in settlement of policies

The consumers sometimes faces difficulties while claiming insurance policies. The complex procedures and delays in the process due to improper settlement policies are the major challenges for the market players that restricts the consumers to opt for the vehicle insurance policies.

Recent Developments

In August 2021, AXA S.A launcheditslatest digital claims solution,STeP that aimed to simplify the processes involved in vehicle insurance.

Vehicle Insurance Market Players

PEOPLE’S INSURANCE COMPANY OF CHINA
ALLSTATE INSURANCE COMPANY
CHINA PACIFIC INSURANCE CO.
ALLIANZ
STATE FARM MUTUAL
TOKIO MARINE GROUP
AUTOMOBILE INSURANCE
GEICO
PING AN INSURANCE (GROUP) COMPANY OF CHINA, LTD.
ADMIRAL GROUP PLC
BERKSHIRE HATHAWAY INC.

Segments Covered in the Report

By Coverage

Third Party Liability
Comprehensive

By Application

Personal Vehicle
Commercial Vehicle

By Distribution Channel

Insurance Agents/Brokers
Direct Response
Banks
Others

By Vehicle Type

New Vehicles
Used Vehicles

By Geography

North America
- U.S.
- Canada
Europe
- U.K.
- Germany
- France
Asia-Pacific
- China
- India
- Japan
- South Korea
- Malaysia
- Philippines
Latin America
- Brazil
- Rest of Latin America
Middle East & Africa (MEA)
- GCC
- North Africa
- South Africa
- Rest of the Middle East & Africa