VEHICLE INSURANCE MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2024-2031)

Vehicle Insurance Market Size and Trends

Global vehicle insurance market is estimated to be valued at US$ 993.88 billion in 2024 and is expected to reach US$ 1,729.64 billion by 2031, exhibiting a compound annual growth rate (CAGR) of 8.2% from 2024 to 2031.

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The market is expected to witness positive growth over the forecast period due  to factors such as rise in number of vehicles on road globally and mandatory insurance regulations. However, increasing adoption of autonomous vehicles and developments in car sharing business models may negatively impact growth of conventional private motor insurance business over the long term.

Increased Vehicle Ownership

With the rapid economic growth and rising disposable incomes, vehicle ownership has increased substantially over the past decade across both urban and rural areas. As people incomes increases, their ability to purchase vehicles also increases. Growing young population with higher spending power prefers to own personal vehicles for convenience and social status. Car loans and financing options provided by banks and non-banking financial institutions have also made vehicle purchase more affordable for middle-income groups. Higher vehicle ownership directly leads to a larger customer base for insurance companies as vehicle insurance is mandated by law. Even for two-wheelers and commercial vehicles, In industries where there's a lot of need for delivering goods and getting them to their final destination, the demand for insurance keeps increasing every year. As more private and commercial vehicles hit the road, both for businesses and personal use, the need for insurance keeps going up. This trend is expected to continue over the long run, providing a steady stream of demand for vehicle insurance in the country.

As businesses grow and evolve, people become more aware of the importance of reducing risks. In the past decades, as highways and road infrastructure have expanded, accidents and associated financial losses have become more common. The costs of vehicle repair and medical care in case of accidents are increasingly burdensome for average households. At the same time, exposure to international practices and risk transfer mechanisms through media and social interactions has played a role in altering people's perception of risks. Moreover, strict enforcement of laws has made vehicle insurance compulsory for several vehicle categories. Together, these factors have pushed individuals and fleet operators to reconsider their approach and proactively insure themselves against unforeseen circumstances. Insurers also recognize changing risk appetites and launch new products tailored to customers' needs as well as different vehicle types. This evolution towards a more prudent approach to managing risks and costs will be a key driver that strengthens insurance demand in the near future.