Liability Insurance Market Size is Expected to Reach $432.81 Billion by 2031

According to a new report published by Allied Market Research, titled, “Liability Insurance Market," The liability insurance market size was valued at $252.34 billion in 2021, and is estimated to reach $432.81 billion by 2031, growing at a CAGR of 5.7% from 2022 to 2031.

Liability insurance minimizes the business risk, such as bodily injury caused to any person because of faulty machines or any other circumstances. In addition, it reduces out of pocket costs for the insured, since the importance of liability insurance is that every business faces claims that can come up during normal operations. Without coverage, the insured have to pay out of pocket to cover claims, which can put their business at financial risk. Surge in awareness of liability insurance in developing countries propels the liability insurance market growth. However, increase in liability insurance premium cost and lack of knowledge about coverage included in liability insurance policy are some major factors that limit the liability insurance market. On the contrary, liability insurance is an essential coverage for providing compensation for employees to recover from a work-related injury or illness. Therefore, rise in cases of work related accidents is expected to provide major lucrative opportunities for the growth of the liability insurance market trends.

The liability insurance market is segmented on the basis of coverage type, enterprise size, application, and region. By coverage type, it is segmented into general liability insurance, professional liability insurance (errors and omissions), and insurance for directors and officers. By enterprise size, it is divided into medium-sized enterprises, large enterprises, and small enterprises. By application, it is bifurcated into personal and commercial. By region, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.

On the basis of coverage type, the general liability insurance attained the highest growth during the forecast period. This is attributed to the fact that general liability insurance is the highest demanded policy since insured are constantly under the risk of incurring bodily injury, which may cause them to pay for medical bills and other compensation to the injured person. Medical liability insurance helps to pay for medical bills resulting from an accident caused by the insured and also pay for repairs to damages from an accident caused by the insured. Therefore, the demand for general liability insurance has grown significantly.

By region, North America is the highest growing region in liability insurance industry during the forecast period. This is attributed to the fact that consumers in the U.S. and Canada are more aware about the policy coverage and premium cost of umbrella liability insurance. Moreover, the growing number of accidents in factories where manpower is involved has significantly grown in the U.S. Thus, chances of accidents and bodily injuries to workers have also grown simultaneously. Thus, consumers in North America, particularly in the U.S. are purchasing third party liability insurance to cover such unforeseen circumstances.

The liability insurance market has been moderately impacted by the COVID-19 outbreak. This is attributed to the fact that consumer trends toward public liability insurance are changing and key players in the market are adopting technologies, such as artificial intelligence-based solutions for claim processing & cognitive automation for real-time interaction with consumers. For instance, in 2020, the U.S.-based liability insurance company, Humana, partnered with Oracle to enable the usage of artificial intelligence for providing an automated, transparent, and real-time claim processing experience to consumers.   

Key findings of the study

• By coverage type, the general liability insurance segment led the liability insurance market in terms of revenue in 2021.
• By application, the commercial segment accounted for the highest liability insurance market share in 2021.
• By region, North America generated the highest revenue in 2021.

The key players profiled in the liability insurance market analysis are American International Group Inc, Allianz, AXA SA, CNA Financial Corporation, Chubb, IFFCO-Tokio General Insurance Company Limited, Liberty General Insurance Limited, The Hartford, The Travelers Indemnity Company, and Zurich American Insurance Company. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.