Global Motor Insurance Market 2024-2030

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    MOTOR INSURANCE MARKET

     

    KEY FINDINGS

     

    1. Premiums from motor insurance accounts for around 40% of total non-life insurance premiums in 2019. This is expected to increase in the next few years due to increasing demand from developing countries primarily Asia.
    2. InsurTech, which aims at changing the insurance industry parti
    3. cularly motor insurance by leveraging new technologies is gaining momentum. Countries like Hong-Kong have launched projects to make Hong-Kong as the InsurTech hub in Asia
    4. The trends that are expected to change the landscape of the industry include emergence of shared mobility, shift from personal to commercial ownership of cars, data overload, digitalisation and artificial intelligence.
    5. Insurers have provided new developments in existing policies such as pay-as-you-drive, usage-based insurance, or telematics insurance to improve the claim processes and deal with unprecedented circumstances
    6. Allianz X, has announced plans to invest in the Mobility Trader Holding GmbH which is the parent company of heycar.
    7. Allstate Insurance has announced that it will provide commercial auto coverage to the company Lyft in the states of California, Indiana, Kansas, Iowa, Ohio, West Virginia, Kentucky and Missouri.
    8. General Motors, launched an automotive insurance program in agreement with its subsidiary OnStar. 
    9. State Farm is collaborating with Hagerty to introduce a new insurance product for classic vehicles named State Farm Classic+ set to begin from 2022.
    10. ELEMENT has raised approximately $19.5 million as an additional investment from new and existing investors.
    11. Allianz Insurance Holding company in China has received approval to establish a first wholly foreign-owned insurance asset management company from the China Banking and Insurance Regulatory Commission
    12. Allianz Australia in July 2021, completed the transaction to acquire Westpac’s general insurance sector. The company in March 2021, announced the acquisition of Aviva Italia S. p. A. for an amount worth EUR 330 million.
    13. Allstate insurance completed the acquisition of National General Holdings Corporation in January 2021, the agreement was closed at $4 billion.
    14. AXA UK&I  announces the acquisition of the renewal rights to Ageas UK’s commercial business.

     

     

    Motor Insurance Market , automotive insurance market growth, global motor insurance market

    INTRODUCTION TO MOTOR INSURANCE MARKET

     

    Vehicle insurance (also known as car insurance, motor insurance or auto insurance) is insurance for cars, trucks, motorcycles, and other road vehicles.

     

    Its primary use is to provide financial protection against physical damage or bodily injury resulting from traffic collisions and against liability that could also arise from incidents in a vehicle.

     

    Vehicle insurance may additionally offer financial protection against theft of the vehicle, and against damage to the vehicle sustained from events other than traffic collisions, such as keying, weather or natural disasters, and damage sustained by colliding with stationary objects.

     

    Rise in number of accidents, implementation of stringent government regulation for adoption of auto insurance, and surge in automobile sales across the globe drive the growth of the global auto insurance market.

     

    MOTOR INSURANCE MARKET DYNAMICS

     

    SI No Timeline Company Developments
    1 2021 September Allianz Insurance Allianz announces its intention to enter the motor insurance sector in Vietnam through a digital joint venture (JV) to be set up with the FPT Group – driving long-term success in the market and expanding Allianz’s footprint in Asia. 

     

    2 2022 January Tata Motors Tata Motors has tied up with United India Insurance, National Insurance Company and Royal Sundaram Insurance for extending motor insurance cover to its customers through a single-window facility.
    3 2021 October Lemonade Lemonade revealed  its entry into auto insurance. It announced the acquisition of Metromile, one of the largest usage-based auto insurers in the world

     

    Digital ecosystem based on a mutual partnership, Internet of Things (IoT) and big data analytics are joining hands to reshape the global auto insurance industry.

     

    With driving forces arising from both inside and outside the industry, general insurers who can rapidly and flexibly incorporate such emerging technologies in their operational strategies will win in this game changing marketplace.

     

    Meanwhile, insurance regulators are also taking action to support this rising market trend by fostering a favourable regulatory environment for InsurTech.

     

    InsurTech described as a transformational force which is pushed by innovative technology forward has disrupted the business models on which such companies operated.

     

    Estimates indicate that around USD 200 Billion market value of auto insurance industry is at the brink of change due to new mobility, car technology, digitalisation and regulation. If such a disruption happens, it is expected that premiums in Japan would fall by 84% in 2040 as compared to 2015.

     

    In addition, there would be a fundamental shift in personal ownership of cars to commercial ownership which would severely affect the industry in the coming decade.

     

    infographic: Motor Insurance Market, Motor Insurance Market Size, Motor Insurance Market Trends, Motor Insurance Market Forecast, Motor Insurance Market Risks, Motor Insurance Market Report, Motor Insurance Market Share

     

    As the ratio of personal to commercial ownership of cars increases, from 50/50 to 20/70 in 2030 resulting into the fall of the personal motor market by 35%, it invites for a product innovation on the part of insurers to ensure their survival and growth.

     

    The digital investment unit of the Allianz Group, Allianz X, has announced plans to invest in the Mobility Trader Holding GmbH which is the parent company of heycar.

     

    The agreement is set to extend the heycar platform with products and services from Allianz Insurance to seamlessly integrate them in the digitalisation of the company.

     

    The existing investors of the company include Volkswagen financial services and Daimler mobility. 

     

    The company Allstate Insurance has announced that it will provide commercial auto coverage to the company Lyft in the states of California, Indiana, Kansas, Iowa, Ohio, West Virginia, Kentucky and Missouri.

     

    The coverage will be applicable throughout the life cycle of the trip from Lyft from pick up to the trip completion. All the riders availing the services of Lyft will be automatically insured and covered under the policy with no additional costs.

     

    The company General Motors in November 2020, launched an automotive insurance program in agreement with its subsidiary OnStar.

     

    The new scheme is to provide tailored insurance rates based on the customers use of vehicle safety systems and individual driving behaviour. 

     

    To know more about US Motor Insurance Market, read our report

     

    The company State Farm is collaborating with Hagerty which is an automotive lifestyle brand based in Michigan to introduce a new insurance product for classic vehicles named State Farm Classic+ which is set to begin from 2022.

     

    The German Company ELEMENT, which provides digital insurance solutions, has raised approximately $19.5 million as an additional investment from new and existing investors.

     

    Including the latest funding round, the total investment in the insurtech ELEMENT has closed with $80.3 million.

     

    The Insurance agency technology firm Vertafore has launched a new product to power the data and analytics of users to aid independent agencies.

     

    The company Mile Auto which is a telematics driven auto insurance managing agency has raised $10.3 million in the latest funding round and has plans to get into a partnership with Ford Motor Company in an attempt to target customers who do not drive often.

     

    Sr. No. Timeline Company Updates
    1

     

    September 2021 IPPB and Bajaj Allianz India Post Payments Bank (IPPB) strategically allied with Bajaj Allianz General Insurance for the distribution of their non-life insurance products, including motor insurance, through its robust network of 650 branches and over 136,000 banking access points across the country.
    2 September 2021 Berkshire Hathaway Homestate Berkshire Hathaway Homestate Companies deploys Vymo’s cutting-edge sales acceleration platform to help wholesalers optimize their engagement with agency partners through actionable insights
    3 July 2021 Bajaj Allianz Bank of India and Bajaj Allianz General Insurance partnered to offer insurance products to customers via the Bank’s network of 5084 branches, 80 Retail Business Centres (RBC) and 60 SME City Centres (SMECC) across the country.
    4 November 2020 Bharti Axa and Airtel Payment Banks Airtel Payments Bank partnered with Bharti AXA General Insurance to offer comprehensive car insurance to over 3 crore customers of the bank.
    5 September 2020 Munich Re and Acko General insurance start-up Acko raised $60 million from German reinsurer Munich Re in its Series D funding round. This marks Munich Re’s first investment in India.
    6 May 2020 Flipkart and Bajaj Allianz Flipkart tied-up with Bajaj Allianz General Insu to offer digital motor insurance for privately owned two and four-wheeler vehicles. The tie-up will enable customers to buy insurance through the Flipkart app.

     

    Ford and State Farm are pleased to announce the availability of usage-based insurance for drivers of qualifying connected Ford or Lincoln vehicles through the launch of Drive Safe & Save Connected Car (UBI). 

     

    Customers of State Farm with qualified connected vehicles have the option to enrol in the Drive Safe & Save State Farm UBI programme, which adapts premiums based on the mileage and driving habits of each particular vehicle.

     

    For policies beginning on or after February 27, 2022, State Farm will launch Drive Safe & Save Connected Car in Alaska, Idaho, Montana, and Oregon before expanding to further states (excluding Calif., Mass. and R.I.).

     

    By taking advantage of existing good driving habits or learning to develop better driving habits and reducing their premium, State Farm customers who drive an eligible Ford or Lincoln car can better control their overall vehicle ownership costs. 

     

    In order to allow Drive Safe & Save, eligible connected Ford vehicles from the 2020 Model Year and later can, with the vehicle owner’s permission, directly share information with State Farm.

     

    Customers may receive a larger insurance discount as they continue to improve their driving habits.

     

    For Oregon residents searching for auto insurance that fits with their values—and their budget—Lemonade Car will be a welcome alternative.

     

    The state is known for its environmentally friendly practises and low-mileage drivers.

     

    For those who choose to commute by bicycle or work from home during the week, Lemonade Car offers the option to only pay for the miles they actually use on top of a reasonable monthly base fee.

     

    Drivers now have a new alternative for auto insurance with the Lemonade app, which includes quick and easy claims processing and built-in safety features like free crash detection and emergency services.

     

    In order to reduce its drivers’ carbon emissions, Lemonade Car also supports reforestation projects in Oregon’s Santiam State Forest, which is home to Douglas Fir and Western Red Cedars

     

    Policies will be priced according to the driver’s mileage, which will be taken into account when determining their price. Drivers will only pay for the miles they actually travel with a cheap monthly base fee plus a few cents per mile, which is ideal for low mileage drivers.

     

    Benefits for drivers who care about the environment include Lemonade Car’s appropriate coverage for low mileage drivers and its funding of reforestation, which over time will help to offset customers’ carbon emissions.

     

    Quick claims processing and emergency services when needed: With Lemonade Car, you can customise your coverages, add a new car, and more through the Lemonade app.

     

    Lemonade Car also offers a first-of-its-kind claims process that enables users to file claims in just a few minutes.

     

    Additionally, drivers have the ability to track repairs, body shop work, and more as necessary, as well as access towing services and emergency EV battery recharge.

     

    Insurance powered by data: Lemonade Car has the experience to offer affordable rates and handle claims swiftly and efficiently thanks to the billions of miles of data beneath the hood.

     

    savings for bundling: In Oregon, new and existing customers can receive savings for bundling Renters, Homeowners, Pet, and Life with other Lemonade products to save up to hundreds of dollars a year.

     

    INDIA MOTOR INSURANCE MARKET

     

    The Ministry of Road Transport and Highways has announced plans to make the use of FASTag mandatory for buying third party motor insurance for every vehicle.

     

    The policy has come into effect from April of 2021. The Finance ministry also announced to infuse $413.13 million in the state owned general insurance companies to improve the overall financial health of the companies.

     

    In India, the overall market size of the insurance sector is expected to US$ 280 billion in 2020. Gross premium collected by life insurance companies in India increased from Rs. 2.56 trillion (US$ 39.7 billion) in FY12 to Rs. 7.31 trillion (US$ 94.7 billion) in FY20. During FY12-FY20, premium from new business of life insurance companies in India increased at a CAGR of 15% to reach Rs. 2.13 trillion (US$ 37 billion) in FY20.

     

    Government’s policy of insuring the uninsured has gradually pushed insurance penetration in the country and proliferation of insurance schemes. Overall insurance penetration (premiums as% of GDP) in India reached 3.71% in FY19 from 2.71% in FY02.

     

    Life insurers reported 14% YoY growth in individual annualized premium equivalent (APE) in October 2020, compared with 4% YoY in September 2020.

     

    infographic: Motor Insurance Market, Motor Insurance Market Size, Motor Insurance Market Trends, Motor Insurance Market Forecast, Motor Insurance Market Risks, Motor Insurance Market Report, Motor Insurance Market Share

     

    The market share of private sector companies in the non-life insurance market rose from 15% in FY04 to 56% in FY21 (till April 2020). In life insurance segment, private players had a market share of 31.3% in new business in FY20.

     

    The scope of IoT in Indian insurance market continues to go beyond telematics and customer risk assessment. Currently, there are 110+ InsurTech start-ups operating in India.

     

    RISK-BASED SOLUTIONS IN MOTOR INSURANCE MARKET

     

    ICICI Lombard explains three ways in which risk-based solutions are being offered to enhance the consumer experience of buying motor insurance.  ‘Based on telematics behavior, a customer can now enjoy better premiums.

     

    A customer with relatively low vehicle usage can buy a limited kilometer plan and choose to pay considerably less than a conventional plan. A customer can buy a single policy for all vehicles registered under their name, leading to ease of keeping the insurance policy and hassle-free renewals for all vehicles simultaneously.’

     

    USAGE-BASED POLICY MODELS IN MOTOR INSURANCE MARKET

     

    Edelweiss General Insurance started operations two years ago, with auto insurance being a key segment and has since then introduced new age offerings for its customers. 

     

    The company’s recently launched driver-based insurance model called SWITCH, in which the insurance is calculated on the age and experience of the driver, uses a pay-as-you-use model that allows the customer to pay the premium only on the days they use the vehicle. This offers significant cost savings and convenience.

     

    ZERO TOUCH SERVICES IN MOTOR INSURANCE MARKET

     

    People have gradually started looking at contactless or zero touch services where they do not have to come in physical contact with a third party.

     

    Insurance companies such as Digit, which has a 2.6% overall market share for motor insurance in India as of June 2020, offers a zero touch experience with its pre-inspection benefit, paperless insurance and cloud-based service.

     

    TELEMATICS IN MOTOR INSURANCE MARKET

     

    An increasing number of commercial vehicles are opting for telematics solutions owing to inefficiencies and challenges in the existing transporting ecosystem. iAssure’s think with increased adoption of FASTag and digitisation of process at Regional Transport Offices, there might be huge data insight that can be made available towards making consumer-friendly products.

     

    CHINA MOTOR INSURANCE MARKET

     

    China is the second largest car ownership market in the world. On September 3, the China Banking and Insurance Regulatory Commission officially issued the Guiding Opinions on Implementing Comprehensive Reform of Auto Insurance.

     

    This aims to give full play to the decisive role of the market in the allocation of auto insurance resources, better the government’s role, and minimize direct supervision.

     

    The total liability limit for compulsory traffic insurance will be increased from 122,000 yuan (US$18,027) to 200,000 yuan, of which the death and disability compensation limit will rise from 110,000 yuan to 180,000 yuan.

     

    Consumers will benefit from lower prices, more choice and better protection, while insurers see more varied revenue streams from new products and services such as electric vehicle insurance, usage-based insurance and telematics, laying the foundation of sustainable industry development. (Swiss Re)

     

    The sector suffers from high pricing, high service charges, disorderly competition, and data distortion, while China’s auto insurers booked revenues of CNY818.9 billion (USD119.7 billion) last year, equal to 63 percent of property insurance premiums, according to the CBIRC.

     

    Industry insiders say all market participants want to push reform, but are worried about a possible drop in premium levels and a rise in underwriting losses.

     

    Total cost ratios in the sector were 99.4 percent in 2015, 99.1 percent in 2016, 99 percent in 2017, and 99.9 percent in 2018, near the break-even point for underwriters.

     

    PICC is one of the largest insurance providers in China and the leading player for car insurance in the country.

     

    It provides almost nine types of auto insurance for different purposes, for instance, coverage for scratched and broken windows, coverage for theft and accidents and many more.

     

    PING AN is another leading auto insurance provider in the country with approximately 40 million customers.

     

    The company Allianz Insurance Holding company in China has received approval to establish a first wholly foreign-owned insurance asset management company from the China Banking and Insurance Regulatory Commission.

     

    The asset management company will be headquartered in the city of Beijing with a registered capital of  $15.4 million.

     

    infographic: Motor Insurance Market, Motor Insurance Market Size, Motor Insurance Market Trends, Motor Insurance Market Forecast, Motor Insurance Market Risks, Motor Insurance Market Report, Motor Insurance Market Share

     

    EUROPE MOTOR INSURANCE MARKET

     

    Motor insurance — motor liability and “other motor” — is the largest line of nonlife business in Europe. It made up 21.3% of the nonlife primary insurance premium volume across all European Economic Area countries in 2018, according to figures from the European Insurance and Occupational Pensions Authority, or EIOPA.

     

    According to data from pan-European industry trade body Insurance Europe’s 2019 report into the motor market, motor insurance suffered a four-year losing streak between 2009 and 2012, returning to underwriting profitability in 2013 with a collective, combined ratio across the industry of 98.5%.

     

    Automotive OEMs such as General Motors, Honda, BMW, Daimler, Hyundai, Toyota and PSA Group now show an increasing interest in insurance telematics.

     

    Players such as LexisNexis Risk Solutions, Verisk and CCC Information Services partner with OEMs and normalise connected car data in telematics exchanges which enables insurers to utilise telematics data from a vast range of sources as long as the policyholders agree to share their driving data.

     

    Notable aftermarket telematics service providers with a focus on insurance telematics include Octo Telematics that has a dominant market share and more than 6 million devices in insurance telematics programs

     

    Other end-to-end solution providers such as Vodafone Automotive, Viasat Group, Targa Telematics, IMS and The Floow are also important players on the insurance telematics market. Smartphone-based insurance telematics solutions are now offered on a broad scale in both Europe and North America.

     

    UPCOMING TRENDS IN MOTOR INSURANCE MARKET

     

    The following trends are expected to change the scenario of the Motor Insurance Market in the coming decade-

     

    Pay-as-you-drive In Motor Insurance Market

     

    Due to the onset of the COVID-19 pandemic, many companies introduced the pay-as-you-drive policy. The policy is set to provide lucrative business opportunities for the automotive insurance companies. It allows the vehicle owners to insure their respective vehicle for the number of kilometers they will approximately drive instead of the average whole conventionally estimated for in a year.

     

    Accident proof technology and the autonomous car In Motor Insurance Market

     

    With increasing in-car safety features and emergence of autonomous cars as well as external technology which could lead to better accident analysis and safer driving through speed control, it reduces and shifts the shape of the risk pool. It is expected that such a disruption would progressively slow down growth in mature economics such as United Kingdom by as high as 10%.

     

    Motor Insurance Market Shared mobility behaviours and models which are driven by the growth of the sharing economy and consumers switching to shared means of transport leading to new product developments such as Usage Based Insurance.

     

    Usage Based Insurance In Motor Insurance Market

     

    Usage-based insurance (UBI), which is also referred to as pay-per-mile, pay-as-you-drive, or pay-as-you-go, is a type of auto insurance, in which the insurer can measure how far a vehicle is driven, where it’s driven, and how it’s driven.

     

    UBI is generally powered by telematics technology that is pre-installed in a vehicle’s network or can be used through a plug-in device/mobile application. Telematics devices provide the insurers with a wide range of data, such as braking and accelerating, to measure the drivers’ behaviour and usage of the vehicle.

     

    Based on the collected data, the insurers calculate the insurance premium for that particular policy. As par estimates, around 20% of insurers in United States would offer such insurance in next five years.

     

    Increase in data In Motor Insurance Market

     

    Insurers using data is not new but new sources of data come from connected cars, smartphones and apps. Such big data is changing the way insurers need to collect and analyse data for designing products that meet customer satisfaction.

     

    World economics In Motor Insurance Market

     

    Emerging markets are still seeing an increase in car penetration and miles driven, which may offset and overcome some of the pressures from technology on traditional motor insurers.

     

     

    Sr. No. Timeline Company Updates
    1 May 2020 Bajaj Allianz Bajaj Allianz launched Pay as you use motor insurance in India that allows car owners to insure their vehicles for shorter periods of time instead of the run of the mill full year.
    2 August 2020 Zurich Insurance Group Zurich entered a five-year agreement for a usage-based insurance model with By Miles after observing a shift in consumers driving patterns during the pandemic and as lockdown unwinds
    3 March 2020 AXA AXA XL launched a single customisable policy for autonomous vehicles to help companies developing or using the technology to better manage and transfer those new and evolving risks.
    4 June 2017 Bajaj Allianz Bajaj Allianz launched Motor on the Spot, a facility that enables customers to register as well self-inspect their motor insurance claims of up to Rs 20,000 within 30 minutes instead of the usual 7-8 day turn-around time.

     

     

    The way data is used in the industry is experiencing a change. The automobile sector is surely undergoing changes that will improve vehicle safety, change vehicle ownership models, and raise asset utilization, all of which will have an influence on auto insurance.

     

    The advancement of telematics technology is gradually altering the game. The auto insurance industry’s long-term effects of these market developments.

     

    Owing to unpredictable activity in claims severity, insurance switching, more serious traffic offences, and vehicle purchasing due to macroeconomic conditions, some classic patterns resurface in terms of kilometers travelled and insurance searching volumes.

     

    With rising consumer interest in telematics data and an active regulatory and legislative climate, the industry appears to be on the verge of a revolution rather than a comeback.

     

    In the face of changing market stresses, insurers with accurate and complete data are better positioned to price and rate more precisely, process claims more efficiently, and improve customer experience.

     

    Many insurers, regardless of size, will be positioned to make better, more informed decisions and win market share if they adapt by leveraging data and analytics to optimize their workflows and meet clients where they are.

     

    In an environment where premiums will likely decline and coverages will shift, insurers that recognize this early and take appropriate action now will be prepared to navigate the disruption ahead.

     

    They will be able to maintain or grow market share, have greater customer retention, and perhaps most importantly, have the data and expertise necessary to make informed decisions. 

     

    MOTOR INSURANCE MARKET RECENT TECHNOLOGICAL DEVELOPMENT

     

    Inspection of vehicle damage automatically using ML and AI 

     

    This system significantly reduces human intervention, which reduces human mistake.Using AI inspection, insurance companies may automatically manage claims online with minimal human involvement.

     

    Machine learning algorithms that have been previously taught immediately recognise the uploaded documents.

     

    The models further categorise the risk associated with a claim, suggest the next course of action, and administer the policy in accordance with those recommendations. These technologies work together to offer a comprehensive end-to-end motor insurance solution.

     

    Telematics and Geospatial Data

     

    In addition to tracking distance travelled, it also keeps tabs on the condition of the engine, speed, fuel usage, idle time, acceleration, vehicle flaws, position, braking, tyre strength, and breakdowns.

     

    This information is important since it clearly illustrates how cars are used and gives the insurance company a useful image.

     

    The insurance company may install the device inside your automobile that regularly measures telematics and provides performance data.

     

    Such thorough data allows an insurer to precisely determine the insurance premium amount and plan for any motor vehicle. 

     

    Electrification of vehicles

     

    We see electric vehicles (EVs) as an enabling platform for autonomous driving and connectivity, with more potential for disruption coming from its direct-to-consumer sales model, even though they will likely bring about some short-term changes to insurance, including various new coverages and implications for claims handling.

     

    Autonomous vehicle

     

    Because technology promises to drastically reduce accident frequency, improving safety and providing a way to convert auto insurance into a “predict and prevent” product, autonomous driving may have the greatest disruptive impact on the insurance industry. Significantly, the commercial entity connected to the autonomous vehicle (AV) technology and capabilities will bear the burden of insurance liability instead of the human operator. 

     

    Insurance company chatbots

     

    Laborious tasks can be easily automated using chatbots, reporting systems, mobile technology, and voice recognition algorithms. Chatbots can perform as well as a huge call centre and significantly reduce the cost of customer service and sales.

     

    MOTOR INSURANCE MARKET NEW LAUNCH

     

    Tesla isn’t the only major automaker aiming to shake up the insurance sector; General Motors (GM) has formed its own insurance division.

     

    The carmaker has announced OnStar Insurance, a new insurance business powered by OnStar, a GM subsidiary that provides connected car services.

     

    GM also announced the launch of OnStar Insurance Services, which will serve as the exclusive representative for OnStar Insurance.

     

    Customers who purchase OnStar Insurance consent to having their driving behaviours monitored by the OnStar device found in all GM vehicles.

     

    OnStar Insurance may reward safe driving behaviour with lower insurance premiums and advise drivers through proactive recommendations to improve driving behaviours using this telematics strategy.

     

    The insurance is designed to be marketed in conjunction with OnStar’s telematics and connected car services to create a holistic vehicle security experience.

     

    Policyholders with both OnStar Insurance and OnStar Safety & Security, according to GM, may rest easy knowing that their cars’ automatic crash detection systems will quickly alert an advisor, who can dispatch assistance.

     

    The insurance sold by OnStar Insurance Services is underwritten and issued by American Family Mutual Insurance Company member firms.

     

    According to GM, the insurance agency is collaborating with insurance carrier partners to provide insurance at competitive rates based on individual vehicle usage and to promote safe driving practises.

     

    Irdai recently granted insurance companies permission to introduce telematics-based vehicle insurance coverages, including PAYD, allowing drivers to choose their own insurance budgets.

     

    The “Pay as You Drive” (PAYD) policy from New India Assurance (NIA) has been hailed as “revolutionary” with features including discounts on renewals, coverage that extends beyond distance limits, and improved protections like nil depreciation, roadside assistance, return to invoice, etc.

     

    Toyota Insurance Management Solutions has launched its first branded product, Toyota Auto Insurance, with the goal of providing clients with high-quality, personalised coverage at a reasonable price.

     

    Toyota Auto Insurance allows customers to purchase policies quickly, easily, and conveniently through Toyota’s cutting-edge mobile app, call centre agents, and participating Toyota dealerships.

     

    Toggle, the underwriter, part of Farmers Insurance, one of the nation’s largest multiline insurer groups, provides Toyota Auto Insurance customers with best-in-class service and more than 90 years of insurance insights, knowledge, and award-winning claims support.

     

    Customers also benefit from special “Toyotally Awesome” prices and, when possible, Toyota Genuine Parts for repairs.

     

    The ‘Pay As You Drive’ motor insurance policy is offered from New India Assurance (NIA).  It has benefits including discounts on renewals, coverage that extends beyond the set distance, and improved protections like nil depreciation, roadside assistance, return to invoice, etc. Numerous advantages are included with the policy.

     

    In the event that the vehicle travels within the allotted km, the customer may be able to save money through savings on renewal premiums.

     

    Discounted “own damage premium” is applied to the base rate. Furthermore, even if the car has been driven more than the threshold limit, the coverage will still last for as long as the policy is still in effect. 

     

    According to a press release from the biggest non-life insurance company in India, customers can still get a discount on the renewal, albeit at a lesser range than is valid.

     

    In addition to these benefits, the policy buyer can add more protections, such as zero depreciation, engine protection, return to invoice, roadside assistance, etc., by paying an extra fee.

     

    The PAYD policy satisfies a long-standing desire among consumers for straightforward, adaptable goods that take various consumption patterns into account.

     

    One of the few products on the market that can assist the consumer in controlling his spending on car maintenance is this one.

     

    The risk posed by uninsured and underinsured automobiles operating on the road will be reduced by this product’s promotion of better compliance.

     

    VS introduced the industry’s first motor vehicle insurance policy with pricing based solely on driving behaviour. At VS, Iceland’s top insurance provider, “Prevention is better than cure” serves as a guiding principle.

     

    The insurer’s digital innovation team came up with the ideal solution—an insurance priced exclusively based on driving behaviour—when it came to promoting safe driving, especially among young drivers.

     

    Through the use of an OutSystems-powered consumer interface and corresponding back-office automation, the company dramatically simplified the claims process. 

     

    These kinds of projects not only enhance the consumer experience but also have a big cultural impact. 

     

    The company’s goal was to develop a car insurance policy that promoted safe driving because it was founded on the principle that prevention is preferable to cure.

     

    Young drivers, who would receive cheaper rates for safer driving, would find telematics and gamification to be particularly appealing.

     

    Since no one knew how long this disruption would last, several insurers started to give partial premium refunds, but these offers were completely random.

     

    A auto insurance policy that was priced exclusively based on driver behaviour was the ideal offering from VS for a market that was changing quickly.

     

    According to this usage-based insurance model, prudent, low-mileage drivers would pay proportionately less than high-mileage, more aggressive drivers.

     

    Next-generation vehicle insurer Clearcover Insurance Company recently launched an embedded insurance solution that enables customers to receive binding quotes when they use Experian’s auto insurance comparison service. 

     

    Customers are given the technology they require by Clearcover so they can confidently take the best decisions possible at each stage.

     

    The business said it is upending the status quo by offering “hassle-free insurance” that redefines what it means to put the needs of the consumer first and offers inexpensive vehicle insurance with one of the fastest claims processes in the industry.

     

    According to Clearcover, this project complements Experian’s consumer-centric approach to its goods and supports the company’s objective to foster growth in its distribution channels.

     

    To satisfy consumer demand and further its goal of becoming the preferred digital vehicle insurer for contemporary drivers, Clearcover is investing in technology.

     

    Users who want to compare vehicle insurance prices can do so thanks to its partner-centric API without ever leaving the Experian website.

     

    The vehicle insurance solution from Experian also advances the company’s goal of giving clients financial independence by offering them the chance to possibly save hundreds of dollars on their current policy.

     

    Through process simplification, new experience development, and capability growth, they are rewriting the insurance playbook.

     

    Experian trusted them to create solutions that enhance the user experience, and they are appreciative of their confidence.

     

    The ‘Pay As You Drive’ vehicle insurance policy was launched by New India Assurance (NIA).  Numerous advantages are included with the policy.

     

    In the event that the vehicle travels within the allotted km, the customer may be able to save money through savings on renewal premiums.

     

    On the fundamental own damage premium, the discount is imposed. Furthermore, even if the car has been driven more than the threshold limit, the coverage will still last for as long as the policy is still in effect.

     

    According to a press release from the biggest non-life insurance company in India, customers can still get a discount on the renewal, albeit at a lesser range than is now valid.

     

    In addition to these benefits, the policy buyer can add more protections, such as zero depreciation, engine protection, return to invoice, roadside assistance, etc., by paying an extra fee.

     

    The PAYD policy satisfies a long-standing desire among consumers for straightforward, adaptable goods that take various consumption patterns into account.

     

    One of the few products on the market that can assist the consumer in controlling his spending on car maintenance is this one.

     

    By encouraging improved compliance, this solution will lower the hazards brought on by uninsured and underinsured automobiles operating on public roads.

     

    For expanded coverage, it includes add-ons like nil depreciation, engine protection, return to invoice, roadside assistance, etc.

     

    Recent approval by the Insurance Regulatory and Development Authority of India (Irdai) has permitted insurance providers to offer telematics-based motor insurance coverages like PAYD and pay how you drive (PHYD), which let car owners choose how much they want to pay for their auto insurance.

     

    As a result, several insurance providers in India provide use-based auto insurance, where they can choose to pay less if the vehicle is garaged more often.

     

    Those that don’t use their cars frequently gain from it. The PHYD insurance premiums are determined based on their driving rather than a set sum as is the case with a typical auto insurance policy.

     

    Therefore, it’s important for businesses to consider the distance driven and the driver’s driving habits when calculating the car’s PHYD insurance costs.

     

    COMPARISON OF SHARE OF MOTOR INSURANCE MARKET IN OVERALL INSURANCE INDUSTRY

     

    infographic: global motor insurance market, automotive insurance market growth, Motor Insurance Market, auto insurance market size, Motor Insurance Market trends and forecast, Motor Insurance Market Risks, Motor Insurance Market report

     

    infographic: global motor insurance market, automotive insurance market growth, Motor Insurance Market, auto insurance market size, Motor Insurance Market trends and forecast, Motor Insurance Market Risks, Motor Insurance Market report

     

     

    AUTO INSURANCE MARKET SIZE AND FORECAST

     

    In case of Asia -Pacific region, particularly India, China, Singapore cases of usage of technology has been found which indicates insurer’s willingness and ambition to change how they engage with customers, price a product and deliver a vastly different experience for their customers.

     

    For example, in China, an auto insurance starts up is offering innovative quasi-insurance products such as “car wash subsidy” and “Traffic jam subsidy” in addition to additional auto insurance products.

     

    The provider tracks the location of the user through an app which provides information if the customer is caught in a traffic jam and offers “gas coupons” to compensate for the same.

     

    In India, increasing technology advancements leading to greater connected world and changing the way that the data is collected and processed has changed the local motor insurance industry.

     

    Currently, auto insurance is bundled with the car purchase and is included in the “on road price” of the product. Once onboarded, insurers would be able to closely engage with customers and to ensure safe driving and prevent accidents.

     

    It is expected that such a move would result in win -win situation for both the parties as it would lead to reduction in the number of claims which account for 70-80 % of the premiums.

     

    Regulatory support in Asia-Pacific region is also expected to boost growth in the region. For example, The Hong Kong Insurance Authority has initiated steps to promote Hong Kong as Insurtech hub in Asia.

     

    Two pilot projects have already been launched- Insurtech Sandbox and Fast Track which are aimed at creating a conducive environment for achieving the usage of such technologies in the industry.

     

    The global motor insurance market is estimated at $XXB in 2024 growing at –% CAGR till 2030

     

    MOTOR INSURANCE MARKET NEW ACQUISITION

     

    State Auto Group, a super-regional property and casualty insurance holding company headquartered in Columbus, Ohio, has completed its acquisition of Liberty Mutual Insurance. State Auto Group distributes personal and small commercial coverages.

     

    Liberty Mutual’s Global Retail Markets US business unit will take State Auto employees. Liberty Mutual adds $2.3 billion in premium and becomes the second-largest carrier in the independent agent channel as a result of the previously announced mutual transaction and merger.

     

    Members of State Automobile Mutual Insurance Company became mutual members of Liberty Mutual Holding Company Inc. under the terms of the arrangement, which gained all requisite regulatory approvals, and Liberty Mutual purchased all publicly held shares of common stock of State Auto Financial Corp. (NASDAQ: STFC) Throughout the most of 2022, the companies will continue to function as distinct enterprises.

     

    Liberty Mutual also confirms Kim Garland’s immediate appointment as president of State Auto upon the completion of the acquisition. Garland was the company’s senior vice president of personal and commercial lines, as well as the managing director of State Auto Labs, until recently.

     

    Waller Helms Consultants LLC and Goldman Sachs & Co. LLC served as financial advisors to Liberty Mutual, while Skadden, Arps, Slate, Meagher & Flom LLP served as legal counsel.

     

    SafeAuto, an Ohio-based company that provides auto insurance that satisfies the very minimum standards in 28 states, and Allstate have agreed to be combined.

     

    SafeAuto will be integrated into National General’s direct-to-consumer non-standard vehicle insurance activities after the acquisition, which will be made through Allstate subsidiary National General.

     

    SafeAuto will boost growth and help us implement our aim of providing cost-effective protection solutions. Through 1-800-SafeAuto and its website, SafeAuto provides direct-to-consumer sales and customer contact centres.

     

    Customers like the flexibility and ease of starting and stopping coverage as well as the opportunity to manage their plans using the company’s mobile application since they are “budget-conscious.

     

    Consumers who depend on their cars to get to work and care for their families but are only able to afford basic limitations coverage, as well as singles and families who are starting out or beginning over, and elderly on fixed incomes, are among the consumer base.

     

    Motor insurers are partnering up to spread their influence in the industry by either merging or collaborating with like-minded firms or acquiring other companies.

     

    In the last few years, there have been several major acquisitions and mergers involving motor insurance firms. The third-largest motor insurer in Japan, Dai-ichi Mutual Life Insurance, acquired Precision Direct Holdings.

     

    This acquisition further strengthened Dai-ichi’s portfolio of motor insurance products, which already included regular insurance and pay-as-you-drive policies.

     

    In the same year, Oakville, Ontario-based Insurance Group acquired Canadian Automobile Insurance Corporation (CAIC). This acquisition expanded the group’s operations in the Canadian motor insurance market, which was already one of its most substantial business units.

     

    Besides, the acquisition gave CAIC’s customers access to the Group’s existing network of brokers and authorized agencies.

     

    Liberty Mutual purchased Ironshore for USD 3 billion, in a deal that made Liberty Mutual the largest motor insurer in the US with a market share of 10%. Liberty Mutual could now provide its customers with a better range of services by combining the two companies’ policy and underwriting operations.

     

    In the same year, ARCH Capital Group entered into a strategic alliance with CDAM Acquisitions LLC, a specialty motor insurance provider.

     

    ARCH acquired a minority stake in the Motor Insurance portfolio held by CDAM Acquisitions. The alliance also enabled ARCH to tap into CDAM’s experience in the underwriting and distribution of motor insurance products.

     

    The U.K.-based insurer RSA acquired the Canadian motor insurer Jevco.This acquisition helped RSA significantly expand its operating base in the Canadian motor insurance market. It also made it the fourth-largest motor insurer in Canada.

     

    Aviva acquired Tesco Underwriting, the motor insurer owned by the U.K. supermarket chain Tesco. This deal gave Aviva the exclusive rights to sell motor insurance to Tesco customers.

     

    Tesco customers were also provided with car insurance from Aviva which extended to include breakdown cover, road hazard protection, courtesy car, and legal expenses policies.

     

    These partnerships and acquisitions continue to shape the motor insurance industry in different markets around the world.

     

    MOTOR INSURANCE MARKET COMPETITIVE LANDSCAPE

     

    SI No Timeline Company Developments
    1 Oct 2021 Digit Insurance Digit Insurance has achieved a valuation of $3.5 billion with its latest fundraising round of $200 million from existing investor Faering Capital and some new ones like Sequoia Capital India and IIFL Alternate Asset Managers
    2 July 2021 Classic car insurance Classic car insurer Hagerty to go public via SPAC in $3 billion deal with Aldel Financial.

     

    3 July 2021 State Farm Automoble Insurance  State Farm Mutual Automobile Insurance Co. agreed to acquire 100% of GAINSCO Inc.’s stock for about $400 million in cash. In the future, the parties expect the transaction to allow State Farm agents to also distribute GAINSCO products

     

    All motor vehicle insurance companies are expected to change their systems and processes so that they can develop and accurately price new products and insurance packages.

     

    For this, motor vehicle insurance companies need to introduce new coverage and performance or usage-based insurance products. Also, vendors are also required to test large volumes of user data to offer competitive pricing to their end-users.

     

    The leading vendors in the market are Allianz, Allstate Insurance, American International Group, Berkshire Hathaway Home state, People’s Insurance Company of China, Ping an Insurance. Other prominent vendors in the market include AXA, Zurich Insurance Group, and Munich Re.

     

    infographic: Motor Insurance Market, Motor Insurance Market Size, Motor Insurance Market Trends, Motor Insurance Market Forecast, Motor Insurance Market Risks, Motor Insurance Market Report, Motor Insurance Market Share

     

    The company Allianz Australia in July 2021, completed the transaction to acquire Westpac’s general insurance sector. The acquisition has been worth $725 million in light of the expansion of Allianz. As part of the agreement approximately 350 employees from Westpac will join Allianz for a 20-year executive agreement.

     

    The company also released the financial results for the second quarter of 2021. The operating profit recorded was EUR 3.3 billion with 10.9% growth in the total revenue year on year. The company also recorded half yearly operating profit of EUR 6.7 billion for the first half of the year 2021.

     

    The company has also become one of the major shareholders in Jubilee General Insurance Limited based in Kenya. The acquisition is a 66% stake in the company which represents 1522622 shares in Jubilee Holdings, the other 34% is retained by East Africa’s largest insurance group.

     

    It has also led a series C funding round of the US insurtech Pie Insurance committing $118 million to the company.

     

    Pie Insurance has received more than $300 million in the external capital. In March 2021, the company also participated in the series C funding round with an Investment of $75 million for the Hong-Kong based fintech WeLab.

     

    The company in March 2021, announced the acquisition of Aviva Italia S. p. A. for an amount worth EUR 330 million. The company’s portfolio is equally distributed between motor as well as non-motor business departments with premiums worth EUR 400 million

     

    The company Allstate Insurance reported the financial results for the second quarter of the year 2021. The total consolidated revenue of the company came out to be $ 12.6 billion which was a significant increase from the revenue of the year 2021 for the second quarter which was $10.4 billion.

     

    The company has also announced the selling of its life insurance sector, Allstate Life Insurance company for $2.8 billion to the entities managed by Blackstone. The agreement will be subject to the regulatory approval of the board with closing by the second half of the year 2021.

     

    The company also completed the acquisition of National General Holdings Corporation in January 2021. The agreement was closed at $4 billion which will help in the expansion of personal line insurance with an increase of 1% market share.

     

    The company Zurich Insurance group released its first quarter earnings in May 2021 with gross premiums worth $11.03 billion, which is a 9% increase from the premiums received in the year 2020 at $9.6 billion. The number of customers of the company has increased by approximately 300,000 with higher customer satisfaction.

     

    The subsidiary of the company Farmers group and Farmers Exchanges have completed acquisition of Metlife’s casualty and property business in the US for $3.94 billion. Zurich insurance contributed $2.43 billion through FGI for the acquisition where the subsidies contributed $1.51 billion.

     

    AXA driveXperience, an application for young drivers, has madeover its app and eliminated its dongle in partnership with Cambridge Mobile Telematics. With new look and update, customers can easily use an application which automatically records the trips where the customer is identified as a driver.

     

    Through this application, they want to make young people aware of their driving behavior and the specific aspects that are part of it.

     

    Think of their app as an innovative and attentive driving assistant that encourages them to drive more safely. They in turn benefit from an attractive premium reduction and the number of road accidents is reduced.

     

    Amica Mutual Insurance announced a partnership with Hover, an insurtech that provides a platform for leveraging smartphone photos of any property into a data set for insurance.

     

    The agreement will provide a complete data package with Hover’s proprietary technology and integration through the CoreLogic Digital Hub Alliance while also transforming customer experience by dramatically lowering inspection costs and streamlining workflows.

     

    ACORD, Aon, and Zurich have joined to launch the ADEPT platform for real-time, automated premium accounting reconciliation between insurers and brokers.

     

    ADEPT (ACORD Data Exchange Platform & Translator) offers a secure, decentralized storage and access service which acts as a ‘single source of truth,’ enabling participants to verify payment information.

     

     

    Sr. No. Timeline Company Sales
    1 Q3-2021

    (Ending September 2021)

    Allianz During the third quarter, Allianz’s total revenues rose by 9.0 percent to 14.1 billion euros in the third quarter of 2021. Adjusted for foreign currency translation and consolidation effects, internal growth was 7.2 percent, mostly driven by a positive volume effect of 5.0 percent and a positive price effect of 1.5 percent. Operating profit was broadly unchanged at 1.3 billion euros.
    2 H1-2021 AXA Revenues were up 7% to 53,865 million Euros, reflecting strong business dynamics underpinned by P&C Commercial lines. The Group’s underlying earnings were Euro 3.6 billion in the first semester, up 101% and representing a 12% growth excluding the impact from Covid-19 last year.
    3 Q3-2021

    (Ending September 2021)

    Munich Re Munich Re doubled its profit in the third quarter, despite big losses from storms in Europe and the United States. Insurer’s profit rose to around 400 million euros ($466.24 million) in the period, compared with 199 million euros a year earlier.
    4 Q3-2021

    (Ending September 2021)

    Berkshire Hathaway Berkshire Hathaway’s overall net income fell in the third quarter from $30.1 billion a year ago to $10.3 billion this third quarter, reflecting losses on insurance underwriting as well as the continuing effects of global supply chain issues and the pandemic.

     

    infographic: Motor Insurance Market, Motor Insurance Market Size, Motor Insurance Market Trends, Motor Insurance Market Forecast, Motor Insurance Market Risks, Motor Insurance Market Report, Motor Insurance Market Share

    TECHNOLOGY

     

    Consumer Demand for Telematics and Usage-Based Insurance at All-Time High.An opportunity for a customizable UBI based on driver safety rather than demographics or credit is shown by new research from Cambridge Mobile Telematics.

     

    The 2019 UBI and Telematics Market Demand, published by Cambridge Mobile Telematics, shows the growth of usage-based insurance (UBI). The identifies a potential for insurers that promote UBI adoption by analysing customer attitudes towards insurance pricing, communication, and value propositions.

     

    It indicates that three-quarters of Americans want insurance prices to be determined.In response to customer demand for customised services, consumer-facing firms and goods have increased their focus on tailored or personalised offers in recent years.

     

    The majority of American drivers (75%) allegedly prefer insurance rates to be dependent on how safely they drive rather than general characteristics like credit score, demographic information, or vehicle type. Currently, more than 50% of clients given UBI insurance models accept it.

     

    Nearly two thirds (64%) of drivers claim to be prepared to download a mobile app that records their driving for a more individualised insurance quote, which shows that the opportunity for insurers to provide customised insurance models is ripe.

     

    Even if there is consumer interest, just slightly more than a quarter (27%) of respondents have been given a UBI programme based on telematics, thus there is still space for insurers to profit from this demand. Less than 10% of the U.S. insurance industry is already telematics-enabled; the two most often used insurance types are pay-as-you-drive and discount-based.

     

    Currently, new business models and services may be deployed at scale to both avoid catastrophes and better respond to emergencies because of technological developments in mobile sensing, IoT, and artificial intelligence.

     

    The clear majority of consumers are interested in initiatives that would make driving safer for them and their families. If an insurance provider offered resources to keep their family safer on the road, such as emergency roadside assistance (78%), trip-by-trip safe driving analysis (60%), or both, more than three-quarters (83%) of respondents believe that would be more interested in their product.

     

    THIS MOTOR INSURANCE MARKET REPORT WILL ANSWER FOLLOWING QUESTIONS

    1. Motor Insurance Market size and Forecast, by region, by application
    2. Average B-2-B price for Motor Insurance Market, by region, per user
    3. Technology trends and related opportunity for new Motor Insurance Market tech suppliers
    4. Motor Insurance Market share of leading vendors, by region,
    5. Coronavirus impact on Motor Insurance Market earnings
    Sl no Topic
    1 Market Segmentation
    2 Scope of the report
    3 Abbreviations
    4 Research Methodology
    5 Executive Summary
    6 Introduction
    7 Insights from Industry stakeholders
    8 Cost breakdown of Product by sub-components and average profit margin
    9 Disruptive innovation in the Industry
    10 Technology trends in the Industry
    11 Consumer trends in the industry
    12 Recent Production Milestones
    13 Component Manufacturing in US, EU and China
    14 COVID-19 impact on overall market
    15 COVID-19 impact on Production of components
    16 COVID-19 impact on Point of sale
    17 Market Segmentation, Dynamics and Forecast by Geography, 2024-2030
    18 Market Segmentation, Dynamics and Forecast by Product Type, 2024-2030
    19 Market Segmentation, Dynamics and Forecast by Application, 2024-2030
    20 Market Segmentation, Dynamics and Forecast by End use, 2024-2030
    21 Product installation rate by OEM, 2023
    22 Incline/Decline in Average B-2-B selling price in past 5 years
    23 Competition from substitute products
    24 Gross margin and average profitability of suppliers
    25 New product development in past 12 months
    26 M&A in past 12 months
    27 Growth strategy of leading players
    28 Market share of vendors, 2023
    29 Company Profiles
    30 Unmet needs and opportunity for new suppliers
    31 Conclusion
    32 Appendix
       
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