Vehicle Insurance Market Size, Share, and Trends 2024 to 2034

Vehicle Insurance Market Size and Growth 2023 to 2032

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

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.

Vehicle Insurance Market in the U.S. 2023 To 2032

The U.S. vehicle insurance market size was valued at USD 203.28 billion in 2023 and is expected to reach USD 386.48 billion by 2032, growing at a CAGR of 7.4% from 2023 to 2032.

North America dominated the global vehicle insurance market in 2022. The presence of leading insurance providers, increased consumer awareness regarding the benefits of vehicle insurance, high disposable income, higher demand for vehicles, and rising affordability of the middle class is boosting the growth of the North America vehicle insurance market. The rising consumer awareness regarding the benefits of electric vehicles is anticipated to boost the demand for the EVs in the upcoming years and hence the demand for the vehicle insurance is expected to rise significantly in North America. The penetration of insurance sector is significantly high in the developed market of US and Canada. The rising adoption of the digital platforms for buying and renewing vehicle insurance policies is playing a significant role in the growth of the North America vehicle insurance market. Furthermore, the rising technological advancements and growing adoption of the digital technologies among the insurance providers is expected to have a positive effect on the growth of the vehicle insurance market during the forecast period.

Asia Pacific is expected to be the fastest-growing market during the forecast period. The rising demand for the vehicles owing to rising economic activities, increasing government investments in the infrastructural development, and rapid urbanization. The presence of huge population and rising middle class is fueling the demand for the vehicles in the region. The mandatory government regulations regarding the adoption of vehicle insurance in nation like India is exponentially contributing to the growth of the Asia Pacific vehicle insurance market. The rapidly rising demand for the alternative fuel vehicles in the developing nation like China is boosting the vehicle insurance market growth. China is the largest producer and consumer of the electric vehicles in the globe.

Growth Factors

The vehicle insurance market is growing at a steady rate owing to the rising affordability of the consumers, growing demand for personal mobility solutions, rising disposable income, improved standards of living, and rise of the middle class are some of the major factors that are boosting the demand for the automotive vehicles across the globe. Furthermore, the rising economic activities across the developing and developed nations are boosting the demand for the commercial vehicles. The rapid growth of the e-commerce industry across the globe has significantly boosted the demand for the transportation solutions that has significantly driven the demand for the commercial vehicles across the globe. The rising adoption of personal and commercial vehicles across the globe is expected to boost the demand for the vehicle insurance during the forecast period. In several countries, buying a vehicle insurance policy is a regulatory mandate. Therefore, the regulatory guidelines regarding the purchase of vehicles play a major role in the growth of the vehicle insurance market. Moreover, the rising cases of road traffic accidents across the globe have led to the adoption of vehicle insurance. The vehicle insurances provide financial protection the vehicle owners against physical damages due to accidents and auto theft.

The rapidly growing popularity of the ride sharing is boosting the insurance premium growth significantly. A rapid rise in the online cab services across the globe has significantly fostered the sales of commercial vehicles. Furthermore, the growing popularity and rising demand for the electric vehicles across the globe is expected to boost the growth of the vehicle insurance market. The adoption of the latest technologies such as artificial intelligence, internet of things, and big data analytics is creating a digital ecosystem for the vehicle insurance industry. The rapid emergence of the online insurance sellers and aggregators are positively boosting the sales of various types of vehicle insurances.

Vehicle Insurance Market Scope

Coverage Insights

Based on the coverage, the third party liability coverage segment dominated the global vehicle insurance market in 2022. The major benefits of this coverage type is that it compensates any damage caused to the third party like disability, death, or any loss to his/her property. The legal and financial care is taken care in case of third party liability coverage. The probability of the vehicle accidents and damage to the third party is a major reason behind the increased preference for the third party liability coverage insurance.

On the other hand, the comprehensive coverage is anticipated to be the fastest-growing segment during the forecast period. The comprehensive policy not only covers the third party damages but also the damages caused to the customers’ vehicles. This is a major benefit of the comprehensive insurance over the third party insurance coverage, which is propelling the demand for the comprehensive coverage across the globe.

Application Insights

Based on the application, the personal vehicle segment dominated the global vehicle insurance market in 2022. The huge number of personal vehicles across the globe has led to the increased demand for the vehicle insurance. The rising affordability owing to the easy financing and EMI options is further fueling the demand for the personal vehicles and consequently the demand for the vehicle insurance is also growing. The rapidly growing popularity of the electric vehicles is expected have a significant impact on the growth of the global vehicle insurance market in the forthcoming years.

The commercial segment is anticipated to witness the highest growth rate during the forecast period. The growing adoption of car rental services and online cab services, along with the growing adoption of electric public transport vehicles is boosting the growth of the commercial vehicles segment. Furthermore, the rising economic development and economic growth owing to rapid industrialization and growing number of economic activities in the developing and underdeveloped regions is significantly boosting the demand for the commercial vehicles and hence it is expected to boost the growth of the vehicle insurance market during the forecast period.

Key Market Developments

• In August 2021, AXA S.A introduced itslatest digital claims solution,STeP, to simplify thevehicle insurance process.
• In May 2021, GEICO partnered with Tractable, an AI technology companyto accelerate its vehicle claim and repair process. The AI are used to assess vehicle damage on the basis of photo, like a human appraiser.

The various developmental strategies such as new product launches, partnerships, acquisitions, and mergers are being adopted by the key market players to strengthen their position and gain market share. The major players are constantly looking to exploit the prevailing market opportunities and gain a competitive over others. These developmental strategies plays a crucial role in the growth of the vehicle insurance market.

Vehicle Insurance Market Companies

• 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