Automotive Insurance Industry Overview:
Market Research Future (MRFR) report on the global automotive insurance market (2019-2024) addresses the COVID-19 analysis of a critical factor affecting the market growth. The research report examines competition in the regional and global markets, providing a rigorous evaluation of factors that could significantly impact the outlook of the industry over the forecast period.
Auto insurance is a contract between the insurance company and the owner of the vehicle that protects the owner of the vehicle from financial loss in the case of vehicle theft or accident. The insurance company offers to pay the cost of the damages covered in exchange for the premium payment. Automotive insurance provides coverage and loss of property (car damage or theft), liability (bodily injury), and medical (injury and rehabilitation cost). Collision insurance, gap insurance, comprehensive insurance, rental insurance, classic car insurance, medical insurance, and uninsured auto insurance are some of the most common car insurance options available on the market.
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Increasing awareness among end-users, the advent of new technologies and products, and the availability of third-party insurance providers in developing countries such as India, Vietnam, Indonesia, and China to bring significant momentum to the automotive insurance industry over the forecast period. Automotive insurance firms are partnering with software providers to provide large-scale data-based solutions to the end user's needs and untapped market demand during a car-related transaction.
In addition, digital technologies and mobile internet are changing the vehicle industry and hence the vehicle/automotive insurance market. There is no question that the automotive industry is experiencing significant changes that will help increase asset utilization, change vehicle ownership models, and boost vehicle safety, which will ultimately impact the global automotive insurance market. In addition, the introduction of autonomous technology has made vehicles significantly safer, which is projected to decrease vehicle accidents by a substantial percentage over the forecast period. In addition, the increase in on-demand transport and the change in liability to manufacturers are some of the factors that are predicted to impede the growth of global automotive insurance during the forecast period.
COVID-19 Impact on Global Automotive Insurance Market
Since the outbreak of COVID-19, the automotive industry has faced a series of problems. Profitability and sales have been severely affected, with automakers now seeking to reclaim ground as the lockdown is lifted across countries. Following the pandemic and the resulting curfews and travel bans, the auto industry is taking steps to recover. Experts note that since the beginning of SARS-CoV-2, there has been a significant shift in consumer behavior and habits, with the demand for shared mobility steadily decreasing, given the rising prevalence of social distancing as well as hygiene. This could lead to a higher demand for lower-priced personal mobility, benefiting both automakers and auto insurance providers.
The novel coronavirus has guided the need for contact-less transactions that could be reflected in vehicle sales in the coming months. Increased preference for online models, along with an increase in online booking for pick-up/delivery, appointments, and online payments, has been favorable for the automotive insurance industry, despite the COVID-19 effect. Many insurance companies give refunds or discounts to consumers, which could further help the market. For example, since the early months of 2020, Liberty Mutual (U.S.) has given almost 15% refunds on two-month auto premiums to customers.
The insurance firmsalso have a significant opportunity amid the SARS-CoV-2 pandemic, as they are now designing personalized goods and services to maintain existing customers and gain new ones. The growing use of private vehicles has resulted in roads being packed with less experienced drivers during peak hours, increasing road accidents. In addition, growing technical and product advances, combined with a large number of active third-party insurance companies in emerging countries such as India, Indonesia, China, and Vietnam, may also contribute to substantial growth in the automotive insurance industry.
For example, in July 2020, Kia introduced an insurance policy for connected cars in India, a joint offering by ICICI Lombard GIC and Bajaj Allianz. This insurance is intended for customers interested in Kia's connected car system and claims settlements.
Automotive Insurance Market Growth and Segmentation:
The global automotive insurance market has been segmented based on vehicle type and insurance type.
By vehicle type, the global automotive insurance market has been segmented into passenger cars, light commercial vehicle (LCV), and heavy commercial vehicle (HCV).
By insurance type, the global automotive insurance market has been segmented into third-party, comprehensive, third-party theft and fire, and others.
Geographically, the global automotive insurance market has been segmented into four major regions: North America, Europe, Asia Pacific, and the rest of the world.
The auto insurance market in the Asia Pacific is projected to dominate the global market due to the substantial rise in vehicle purchases in China, India, and ASEAN countries and the involvement of a large number of insurance companies and third parties in the Asia Pacific. In addition, South America and the Middle East and Africa are projected to see substantial growth in the global automobile insurance industry over the next decade.
The major players involved in the global automotive insurance industry are Allstate Insurance Company (US), RAC Motoring Services (UK), Progressive Casualty Insurance Company (US), Clements Worldwide (US), GEICO (US), NFU Mutual (UK), Zhongan Insurance (China), ABIC Inc. (China), CPIC (China), State Farm Mutual Automobile Insurance Company (US), RSA Insurance Group plc (UK), and Zurich Insurance Group (Switzerland).
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