Auto Insurance Market Expected to Reach $2,274.8 Billion by 2032

According to a new report published by Allied Market Research, titled, “Auto Insurance Market, by Coverage (Third Party Liability Coverage, Collision/Comprehensive/Other Optional Coverages), by Distribution Channel (Insurance Agents/Brokers, Direct Response, Banks, Others) by Vehicle Age (New Vehicles, Used Vehicles) by Application (Personal, Commerical): Global Opportunity Analysis and Industry Forecast, 2024-2032" was valued at $923.4 billion in 2023, and is projected to reach $2,274.8 billion by 2032, growing at a CAGR of 10.8% from 2024 to 2032.

Auto insurance is a contract that protects the insured against financial loss in the event of an accident or theft. It is a legal arrangement between the policyholder and the insurer. In exchange for a premium, the insurance provider guarantees to pay the covered losses in accordance with the policy's conditions. Although auto insurance requirements vary from state to state, bodily injury liability and property damage liability coverage have been mandated in many jurisdictions before using or keeping a vehicle on public roads. The auto insurance market exhibits high growth potential, as the number of road accidents is increasing in most of the countries across the globe.

Moreover, an increase in accidents is one of the main factors behind the global auto insurance market's growth, the implementation of several government rules for purchasing auto insurance, and an increase in automotive industry sales globally due to a rise in consumer per capita income. Additionally, the introduction of auto vehicles hampered the market expansion. Furthermore, incorporation of technology into current product and service lines and rise in demand for third-party liability coverage in emerging nations are projected to foster the growth of the market during the forecast.

On the basis of coverage, the third-party liability coverage segment is expected to grow at the highest growth rate during the forecast period. This growth can be attributed to increase in awareness among vehicle owners about the importance of protecting themselves against third-party claims. However, the collision/comprehensive/other optional coverages segment is expected to exhibit the highest growth during the forecast period. As vehicle ownership rises, particularly in emerging markets, there is a growing demand for more extensive auto insurance coverage options beyond the mandatory third-party liability coverage.

On the basis of region, North America attained the highest growth in 2023. Well-developed insurance infrastructure is accelerating the adoption of the most recent developments, including auto insurance in North America. Moreover, the rise in government initiatives to strengthen insurance infrastructure across the region is further expected to drive the demand for auto insurance solutions. However, Asia-Pacific is projected to be the fastest-growing segment during the forecast period, owing to the availability of cost-effective digital solutions and the rise in the amount of data generation across organizations. In addition, the proliferation of advanced technologies escalates system safety and reduces delays in smart operations.

Furthermore, auto insurance covers medical expenses and legal liabilities arising from accidents that cause injury or property damage to others, typically under third-party liability coverage. Optional coverages, such as uninsured/underinsured motorist coverage, roadside assistance, and rental car reimbursement, further enhance the policy's protection. It is often a mandatory requirement, to ensure that all road users have a basic level of protection, thereby contributing to overall road safety and financial security. Therefore, numerous factors are further expected to accelerate the global auto insurance market growth globally.

KEY FINDINGS OF THE STUDY

• By coverage, the third-party liability coverage segment accounted for the largest auto insurance market share in 2023.
• By distribution channel, the direct response segment accounted for the largest auto insurance market share in 2023.
• By vehicle age, the new vehicle segment accounted for the largest auto insurance market share in 2023.
• By application, the personal segment accounted for the largest auto insurance market share in 2023.
• Region-wise, North America generated the highest revenue in 2023.

The market players operating in the auto insurance market include Berkshire Hathaway Inc., Admiral Group Plc, People's Insurance Company of China, Allstate Insurance Company, CHINA PACIFIC INSURANCE CO., Tokio Marine Group, Ping An Insurance (Group) Company of China, Ltd., Automobile Insurance, Allianz and State Farm Mutual. These major players have adopted various key development strategies such as business expansion, new product launches, and partnerships, which help to drive the growth of the auto insurance market globally.