SHORT TERM INSURANCE MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2025-2032)

Short Term Insurance Market Size and Forecast – 2025-2032

The Global Short Term Insurance Market is estimated to be valued at USD 204.16 billion in 2025 and is expected to reach USD 317.01 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 6.5% from 2025 to 2032.

Key Takeaways of the Global Short Term Insurance Market:

• The homeowner insurance segment is expected to lead the market with an estimated share of 22.7% in 2025.
• The individual segment is expected to lead the market with an estimated share of 72.4% in 2025.
• North America is expected to lead the market, holding a share of 37.3% in 2025. Asia Pacific is anticipated to be the fastest-growing region, with an estimated market share of 22.6% in 2025.

Market Overview:

The short term insurance market is expected to witness steady growth over the forecast period. Factors, such as rising healthcare costs, increasing natural disasters due to climate change, growing awareness about insurance products, and high smartphone and internet penetration, are expected to drive the demand for short term insurance plans. However, uncertainties around employment and income levels during the COVID-19 pandemic might restrict the growth of some short term insurance products in the near term. Overall, the short term nature of the plans makes insurance accessible to more people. 

Segmental Insights

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Product Category Insights – Homeowner Insurance Leads Due to Need for Property Protection

The homeowner insurance segment is expected to dominate the market, holding a share of 22.7% in 2025. This is because owning a home is one of the biggest investments an individual can make. As such, there is a strong need to properly insure the property to protect this significant asset. Homeowner insurance provides coverage for both the physical structure of the home as well as personal belongings inside. It protects against financial loss from unforeseen events like fire, theft, storms, or other disasters. With ever-present risks like these, homeowners recognize the importance of transferring that risk to an insurance provider.

Most property owners take out home insurance policies as part of their mortgage requirements as well. Lenders mandate insurance to ensure the collateral securing the loan is protected. This drives up demand and makes homeowner insurance ubiquitous in many regions. Younger individuals and families are also increasingly investing in homes, growing the customer base. Furthermore, more affluent consumers opt for higher coverage limits that provide robust protection. Natural catastrophes like hurricanes or earthquakes that threaten homes also boost sales cyclically. 

Application Insights – Individual Segment Leads Due to Need for Personal Coverage

The individual segment is expected to continue to dominate the short term insurance market, holding a share of 72.4% in 2025. This is because protection of individual life and health is a universal necessity. Short term individual insurance fills a crucial need by providing temporary coverage during transitions between jobs, school enrollment, or retirement. It bridges healthcare gaps for those not covered by employer or government plans. Individuals appreciate the flexibility to tailor short term plans to their specific needs and budget.

Compared to group insurance restricted by employer qualifications, individual coverage offers more options and freedom of choice. Individuals can include dependents, choose providers and tailor deductibles. This level of customization and control increases ownership and engagement with one's own wellbeing. Changing lifestyles and careers also mean needs evolving rapidly over time, to which individual plans can readily adapt. Younger job seekers, seasonal/gig workers and retirees find individual plans especially suitable during coverage lapses.

Regional Insights

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North America Short Term Insurance Market Trends

North America is expected to dominate the global short term insurance market, holding a market share of approximately 37.3% in 2025. The dominance can be attributed to factors such as the well-established insurance industry ecosystem and supportive regulatory environment. Major insurance carriers like AIG, Progressive, and State Farm have established operations in multiple states supported by a large distribution network of agents and brokers.

Asia Pacific Short Term Insurance Market Trends

The Asia Pacific region, accounting for approximately 22.6% of the market in 2025, is projected to be the fastest-growing region driven by increasing demand from expanding middle-class populations and growing penetration of digital services in key markets. Countries like China, India, and Indonesia are experiencing rapid urbanization and economic development. This has boosted insurance awareness and need for cover against unplanned risks.

Short Term Insurance Market Outlook for Key Countries

U.S. Short Term Insurance Market Trends

The U.S. short term insurance market remains the largest contributor to global short-term insurance revenues, driven by a stringent regulatory environment and a rapidly evolving InsurTech landscape. Auto and property insurance policies dominate, with digital-first players like Lemonade and Root Insurance simplifying purchase journeys through AI-driven underwriting. Leading incumbents, such as State Farm and Allstate, are strengthening direct-to-consumer (DTC) propositions while targeting adjacent areas like on-demand coverage for gig workers through strategic partnerships. The rise of embedded insurance models—where short-term policies are integrated into retail and mobility services—continues to reshape the market.

China Short Term Insurance Market Trends

The China short term insurance market is booming due to rising mobile penetration, enabling insurers to reach lower-tier cities. Government initiatives promoting financial inclusion, digital payments, and data-sharing across industries are driving rapid adoption. Local giants such as Ping An and ZhongAn dominate by leveraging AI and big data analytics for customized pricing and risk assessment. Strategic alliances between global insurers (Allianz, AXA) and local players help expand coverage options, particularly in travel, auto, and microinsurance segments. WeChat and Alipay-integrated insurance offerings have further revolutionized accessibility, making micro-policies available in real time.

India Short Term Insurance Market Trends

The India short term insurance market is benefiting from the government’s push for affordable coverage and shifting consumer habits. Health and travel insurance are leading segments, with cashless services boosting the popularity of short-term medical covers. Insurers such as ICICI Lombard and HDFC ERGO are innovating with microinsurance products tailored for daily transactions, education, and on-demand travel protection. The digital boom is fueling distribution via chatbots, customized portals, and InsurTech startups like Digit Insurance, which are expanding reach into semi-urban and rural areas. Collaborations with e-commerce and fintech firms are further embedding short-term policies into digital payment ecosystems.

U.K. Short Term Insurance Market Trends

The U.K. short term insurance market remains at the forefront due to advanced analytical capabilities, flexible product design, and a strong InsurTech ecosystem. Local players like Aviva and Direct Line Group are integrating open banking APIs to facilitate seamless quote-to-claim journeys. InsurTech firms such as Zego and Cuvva are pioneering on-demand coverage bundles for gig workers, freelancers, and short-term renters. Meanwhile, major insurers are broadening their reach into lifestyle risks, embedded insurance solutions, and partnerships with mobility service providers (such as ride-hailing and car-sharing platforms) to enhance product accessibility.

Market Players, Key Devlopment, and Competitive Intelligence

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Key Developments:

• In February 2025, Howden Group, an insurance group, acquired Major Insurance Services, an Australia-based general insurance brokerage
• In December 2024, Nippon Life, an insurance company, acquired Resolution Life Group, a Bermuda-based group holding several insurance brands, for US$ 8.2 billion

Top Strategies Followed by Global Short Term Insurance Market Players

• Established Players: Leading insurance companies focus on technological innovation, such as artificial intelligence (AI) and data analytics, strategic acquisitions, and global expansion, to reinforce their market dominance.
  • Example: Nippon Life's US$ 8.2 billion acquisition of Resolution Life Group expanded its footprint into the U.S., tapping into a larger and more profitable insurance landscape
• Mid-Level Players: Mid-sized insurance companies adopt strategies such as technological modernization including Upgrading legacy systems to modern, cloud-based platforms, regional expansion, and strategic partnerships to increase their market share.​
  • Example: Talkdesk expanded into Latin America, targeting businesses seeking AI-powered customer experience solutions at competitive pricing.​ Similarly, Five9 partnered with Google Cloud to integrate AI-driven virtual agents into its contact center software, enhancing automation and analytics capabilities.​
• Small-Scale Players: Smaller insurance companies focus on niche markets, customer-centric innovations, and flexible pricing structures to differentiate themselves in the market.​
  • Example: Pula, a Kenya-based microinsurance company, serves over 20 million smallholder farmers across Africa, Asia Pacific, and Latin America, providing insurance payouts to help them recover from climate-related adversities. ​Similarly, Progressive Insurance employs a flexible pricing structure, including a variety of discount options and usage-based rates, to cater to diverse customer segments.

Emerging Startups – Short Term Insurance Industry Ecosystem

• Microinsurance for Emerging Markets: Startups are tapping into developing economies by offering low-cost, short-term microinsurance covering health, travel, and agriculture risks. These policies are designed for low-income individuals and are often distributed via mobile wallets and digital payment platforms.
  • Example: BIMA provides affordable health and life microinsurance across Africa and Asia Pacific, with policies managed via mobile phones. CoverFox partners with local businesses to offer bite-sized insurance plans, such as daily accident covers for gig workers in India.
• Parametric Insurance for Climate & Travel Risks: Parametric insurance uses real-time event triggers (e.g., weather data, flight delays, natural disasters) to automatically pay claims without the need for traditional loss assessment. This model is becoming popular in travel, agriculture, and climate-risk coverage.
  • Example: Jumpstart Insurance offers instant earthquake insurance, where payouts are triggered based on U.S. Geological Survey earthquake data. Arbol provides weather-based parametric insurance for farmers and businesses, ensuring quick payouts when predefined weather conditions occur.
• Digital-First Distribution & Mobile-First Engagement: New-age insurers are focusing on seamless, digital-first customer experiences, leveraging chatbots, mobile apps, and API integrations for direct-to-consumer (DTC) policy distribution.
  • Example: CoverGenius provides instant policy issuance and claims automation via API integrations with e-commerce, travel, and fintech platforms. Getsafe is a fully mobile-first insurer in Europe, allowing customers to purchase, manage, and cancel short-term policies via an app.

Market Report Scope

Market Dynamics

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Global Short Term Insurance Market Driver – Growing Awareness of Financial Risk Management

In recent times, there has been a growing awareness among both individuals and businesses about the importance of financial risk management. With rising economic uncertainties and the increasing frequency and severity of unexpected events such as accidents, natural disasters and epidemics, more customers are realizing the need to plan for contingencies and protect themselves from financial losses. This has increased the demand for short-term insurance products which provide coverage for a limited period of time and allow customers to transfer certain risks to insurance providers. The availability of affordable online insurance options has also boosted the uptake of short-term policies. With the digitalization of the insurance sector and more promotional activities by companies highlighting the benefits of short-term insurance, awareness and preference for these products is expected to further rise in the coming years globally. This will drive higher sales and growth in the overall short term insurance market.

Global Short Term Insurance Market Challenge - High Claim Volatility

The global short term insurance market faces significant challenges due to high claim volatility. Short term policies cover risks for a shorter duration such as a year. This makes it difficult for insurers to accurately predict claims and price risks appropriately. Events like natural disasters or pandemics can lead to unexpectedly high claims in a year that were not foreseen. This affects insurer profitability enormously. It also contributes to increased premiums for customers. Predicting human behaviors that lead to risks is also challenging. With changing lifestyles and consumerism, new risks are continuously emerging. This introduces more uncertainty. Insurers have to invest heavily in data and analytical tools to better understand claims patterns. However, complete elimination of volatility is not feasible given the nature of these risks. Fluctuations in claims will continue to impact underwriting cycles and Financial performance of short term insurers.

Global Short Term Insurance Market Opportunity - Emerging Markets with Growing Awareness of Insurance

The global short term insurance market has significant opportunities in emerging markets that are seeing rising incomes and awareness about insurance products. As standards of living improve in developing nations, people are increasingly recognizing the need to protect their assets and income sources from unforeseen risks and losses. They are showing willingness to pay premiums for suitable insurance policies. This is creating huge potential for insurers to develop and market cost-effective short term insurance offerings tailored for needs of consumers in these new markets. Insurers that position themselves right can benefit immensely from the growing insurance demand driven by evolving risk preferences. Proper product design, distribution reach, and customer education can help insurers capture large customer segments and achieve high growth rates over the long run from emerging markets.

Analyst Opinion (Expert Opinion)

• The global short term insurance market is expected to experience steady growth, driven by the increasing demand for flexible, usage-based insurance solutions. The rise of digital distribution channels and InsurTech innovations has made it easier for consumers to access short-duration policies, particularly in auto, travel, and health segments. Additionally, the gig economy's expansion is fueling demand for on-demand and microinsurance products, benefitting the market.
• A key challenge for the industry is regulatory complexity and fraud prevention. Short-term policies, due to their quick underwriting process, are vulnerable to fraudulent claims. Additionally, navigating compliance requirements across different jurisdictions and digital ecosystems remains a challenge for insurers expanding their offerings.
• North America is expected to maintain its leading market position, supported by a strong InsurTech ecosystem, high insurance penetration, and the increasing adoption of direct-to-consumer digital platforms. Meanwhile, Asia Pacific is projected to be the fastest-growing region, driven by the rising middle-class population, increasing smartphone penetration, and government-backed financial inclusion initiatives. Emerging economies, such as India and China, are witnessing rapid adoption of mobile-based, embedded, and parametric insurance models, reshaping short-term insurance accessibility.​

Market Segmentation

• Product Category Insights (Revenue, USD Bn, 2020 - 2032)
• • Homeowner Insurance
  • Household Insurance
  • Vehicle Insurance
  • Personal Liability Insurance
  • Others
• Application Insights (Revenue, USD Bn, 2020 - 2032)
• • Individual
  • Group
• Regional Insights (Revenue, USD Bn, 2020 - 2032)
• • North America
    • U.S.
    • Canada
  • Latin America
    • Brazil
    • Argentina
    • Mexico
    • Rest of Latin America
  • Europe
    • Germany
    • U.K.
    • Spain
    • France
    • Italy
    • Russia
    • Rest of Europe
  • Asia Pacific
    • China
    • India
    • Japan
    • Australia
    • South Korea
    • ASEAN
    • Rest of Asia Pacific
  • Middle East
    • GCC Countries
    • Israel
    • Rest of Middle East
  • Africa
    • South Africa
    • North Africa
    • Central Africa
• Key Players Insights
  • Allianz
  • Cigna TTK
  • Zurich
  • BUPA
  • UnitedHealth Group
  • Anthem
  • CVS Health
  • Humana
  • Centene
  • WellCare Health Plans
  • State Farm
  • Liberty Mutual
  • Chubb
  • SBI Holdings
  • Santam