Motor Insurance Market

Motor Insurance Market Size and Share:

The global motor insurance market size was valued at USD 911.64 Billion in 2024. Looking forward, IMARC Group estimates the market to reach USD 1,685.92 Billion by 2033, exhibiting a CAGR of 7.1% from 2025-2033.  North America currently dominates the market owing to the rise of usage-based insurance (UBI) powered by telematics, increasing digitalization through mobile apps and online platforms, and the integration of artificial intelligence (AI) to enhance risk assessment, claims processing, and customer service, all leading to more personalized and efficient offerings.

Connected vehicles and telematics are another significant driver of motor insurance. With advancements in technology, vehicles now boast a series of sensors and devices within the Internet of Things (IoT) which enable them to collect a set of data on driving patterns, health of the vehicle, road conditions, etc. By utilizing this data, insurance companies can now craft personal insurance policies for various individual driving patterns, while pushing safe driving behaviors through it, thereby possibly reducing the overall cost. This transition into telematics, along with enhancing risk assessment, allows for more accurate pricing models. Motor insurance becomes even more customer-centric and thus attracts more of the tech-savvy consumer base.

In the U.S. motor insurance market, a key trend is the increasing demand for usage-based insurance (UBI) policies, driven by telematics technology. Insurers are offering customized premiums based on driving behavior, with data collected from in-vehicle devices or mobile apps. In addition to this, the risky driving behavior is on the rise among younger demographics, with distracted driving violations by Gen Z increasing by 24% since 2022 and an alarming 66% compared to 2019. High claim severities continue due to ongoing parts and labor shortages, coupled with rising attorney involvement. Notably, 93% of claimants who previously sought legal counsel are likely to do so again in the future. Also, the regulatory changes and heightened consumer awareness about the importance of comprehensive coverage are influencing the market. The rise in electric vehicles (EVs) and autonomous driving technologies also presents new opportunities and challenges for insurers, necessitating adjustments in risk assessment models and policy offerings.

Motor Insurance Market Trends:

Usage-based insurance (UBI)

Usage-Based Insurance, or UBI, is one of the fastest-growing trends in the motor insurance market, especially in the United States. UBI policies rely on telematics technology, which gathers data about driving habits, such as speed, braking, and mileage. The data are then sent to the insurer, who determines premiums based on actual driving behavior rather than age or location. This differentiated practice enables users to be charged less on premium if found to be a low-risk user. Further, UBI encourages the culture of driving safely. The risk-taking aspect of customers is mitigated by having them in an upright behavior with the knowledge of costs. There is expected to be a strong growth of usage of connected vehicles and apps in the smartphones.

Shift toward digital platforms

The motor insurance market is witnessing a shift primarily toward digital platforms as most customers prefer to shop for convenience, speed, and accessibility. Many of these insurers are investing in making apps and websites more customer-friendly so that policies could be purchased, claims can be filed, and other coverages managed through those platforms. This reduces the interaction in person and helps bring in an overall better experience of customers. Digital tools are also allowing insurers to make underwriting more streamlined, thereby reducing costs and increasing service efficiency. Online comparison platforms have also brought the process of consumers examining different insurance offers into light, thereby creating increased competition and transparency in the issue of pricing.

Integration of artificial intelligence (AI)

The revolution of the motor insurance market is facilitated by artificial intelligence in enhancing the risk assessment, claims processing, and customer service. Algorisms in AI could analyze huge data volumes so that risks could be evaluated and predicted better, therefore allowing insurers to set a premium that will reflect more accurately the risk profile for individual customers. In claim processing, AI facilitates automation of repetitive tasks, accelerating claim settlement, thereby reducing costs in administration. In addition, chatbots and virtual assistants with AI power enhance customer service through prompt response to inquiries and claims updates. Increased application of AI is likely to lead to more personalized, efficient, and cost-effective motor insurance products.

Motor Insurance Industry Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the global motor insurance market, along with forecast at the global, regional, and country levels from 2025-2033. The market has been categorized based on policy type, premium type, and distribution channel.

Analysis by Policy Type:

• Liability Insurance
• Comprehensive Coverage
• Collision Coverage
• Personal Injury Protection
   

Liability insurances stands as the largest component in 2024, due to its mandatory nature and the critical role it plays in protecting individuals and businesses from financial losses caused by accidents. Liability insurance in many regions, such as the U.S. and Europe, is a legal requirement to ensure the vehicle owner has third-party damages or injuries. Most liability insurance coverage consists of both bodily injury liability and property damage liability, both of which are necessary to secure drivers from financial loss. Increasing vehicle ownership globally will only heighten demand for liability insurance, especially in emerging markets, where regulatory frameworks continue to be developed. Additionally, the rising concern about road safety and accident prevention enhances the need for liability coverage in the market.

Analysis by Premium Type:

• Personal Insurance Premiums
• Commercial Insurance Premiums
   

Personal insurance premiums are offered to individual car owners based on risks like accidents, car theft, or damage. However, these premiums vary according to the driver's background, the type of vehicle, and the location in which it is being utilized. Demand for personal automobile insurance increases with increased vehicle ownership as well as awareness.

Besides this, businesses also have to pay for their vehicle fleet in the form of commercial insurance premiums. Generally speaking, the premiums are more expensive than personal premiums. In addition to this, the risk is increased, and these premiums are due to having multiple vehicles, commercial or business-related activities, and they would require specialized coverage, covering a wide array of companies from logistics to service companies.

Analysis by Distribution Channel:

• Insurance Agents/Brokers
• Direct Response
• Banks
• Others
   

In 2024, insurance agents/brokers accounts for the majority of the market due to their established role in connecting consumers with appropriate policies. These intermediaries provide personalized services, helping clients navigate complex policy options, coverage choices, and terms. Their expertise in risk assessment and market knowledge is valuable, especially for customers seeking tailored advice. Additionally, brokers and agents maintain strong relationships with both insurance companies and consumers, offering better customer support and claims assistance. While digital platforms are growing in popularity, many customers still prefer face-to-face interactions or professional guidance to ensure they select the right coverage. This ongoing preference for personalized service and expert advice solidifies the dominant position of agents and brokers in the market.

Regional Analysis:

• North America
  • United States
  • Canada
• Asia-Pacific
  • China
  • Japan
  • India
  • South Korea
  • Australia
  • Indonesia
  • Others
• Europe
  • Germany
  • France
  • United Kingdom
  • Italy
  • Spain
  • Russia
  • Others
• Latin America
  • Brazil
  • Mexico
  • Others
• Middle East and Africa
   

In 2024, North America accounted for the largest market share of due to its well-established infrastructure, high vehicle ownership rates, and mature insurance sector. The U.S., in particular, dominates the region, with a strong demand for both personal and commercial motor insurance driven by mandatory liability coverage, evolving regulatory requirements, and increasing consumer awareness. The adoption of usage-based insurance (UBI) and technological advancements, such as telematics and AI, have further enhanced market growth, offering consumers more personalized policies and lower premiums. Additionally, the rise of electric and autonomous vehicles presents new opportunities for insurers to innovate and expand their product offerings, further strengthening North America's position as the largest market in 2024.

Key Regional Takeaways:

United States Motor Insurance Market Analysis

The US motor insurance market is experiencing significant growth in the adoption of usage-based insurance (UBI), which is reshaping the industry. UBI offers personalized premiums based on driving behavior, and this shift is driven by advancements in telematics and data analytics. According to PTOLEMUS, out of the 875 Million auto insurance policies in the US, approximately 20 Million were usage-based in the past year. This growing trend is not only making insurance more affordable for responsible drivers but also encouraging safer driving. Additionally, regulatory requirements in most states for auto insurance continue to fuel demand, ensuring a steady market for insurers. The rise of electric vehicles (EVs) and autonomous cars also presents new challenges and opportunities for the industry, prompting insurers to adapt their policies. Furthermore, the increasing integration of smart technology, AI, and machine learning enables insurers to enhance risk assessment and streamline claims processes, driving further innovation in the sector. These factors, combined with the growing consumer demand for more personalized, cost-effective solutions, are expected to continue shaping the motor insurance landscape in the United States.

Asia Pacific Motor Insurance Market Analysis

The motor insurance market in the Asia-Pacific (APAC) region is driven by rising vehicle ownership, growing disposable incomes, and rapid urbanization. According to the World Bank, e Pacific and East Asia is the world’s most rapidly urbanizing countries, with an annual urbanization rate of 3%. This surge in urban populations, particularly in countries like China and India, is contributing to higher vehicle sales and increased demand for motor insurance. Additionally, governments are introducing stricter regulations around vehicle insurance, further boosting market growth. The adoption of digital platforms and mobile technology is also making motor insurance more accessible, with consumers embracing telematics-based policies and efficient online services. These factors are fostering a more competitive and innovative insurance landscape in the region.

Europe Motor Insurance Market Analysis

The European motor insurance market is being shaped by a combination of regulatory requirements, technological advancements, and evolving consumer preferences. Insurance is mandatory in most European countries, which ensures steady demand. Additionally, the rise of personalized insurance policies powered by telematics and big data is transforming the sector, with usage-based insurance (UBI) becoming increasingly popular. A key factor influencing the market is the growing adoption of electric vehicles (EVs). According to the International Energy Agency (IEA), while electric car sales are increasing globally, they remain concentrated in a few major markets, with Europe accounting for 25% of global electric car sales in 2023. This shift toward EVs is prompting insurers to adapt their policies to address the unique risks and repair needs associated with electric vehicles. The integration of connected and autonomous vehicles further influences market dynamics, as insurers adopt new approaches to coverage and risk management. Moreover, consumer preferences for digital platforms and comparison websites are fostering innovation and competition within the market, driving down operational costs and enhancing the customer experience. These trends collectively point toward continued growth and transformation in the European motor insurance sector.

Latin America Motor Insurance Market Analysis

The motor insurance market in Latin America is primarily driven by regulatory mandates, increasing vehicle ownership, and a growing middle class. According to the World Bank, the middle class in Latin America grew by 50% and now represents 30% of the population, contributing to higher vehicle sales and increased demand for insurance products. Additionally, many governments have implemented compulsory third-party insurance requirements, boosting market penetration. The rise in disposable incomes, particularly in countries like Brazil and Mexico, coupled with urbanization, further propels the demand for motor insurance. Digital platforms and mobile-based services are also enhancing accessibility and convenience for consumers.

Middle East and Africa Motor Insurance Market Analysis

In the Middle East, the motor insurance market is driven by regulatory frameworks, rising vehicle sales, and increasing road safety awareness. According to the Roads and Transport Authority (RTA), there are 540 cars per 1,000 people in the UAE, reflecting the region’s high vehicle ownership rate. Many Middle Eastern countries, including the UAE and Saudi Arabia, mandate motor insurance, ensuring steady demand. The growing affluence of the population and higher car ownership further fuel the need for insurance products. Additionally, the region's adoption of technology for purchasing and managing policies is supporting market expansion and improving customer convenience.

Competitive Landscape:

The motor insurance market is highly competitive, with numerous established players and emerging insurtech startups. Key industry leaders include companies dominate through extensive distribution networks, strong brand recognition, and diversified offerings. These insurers are increasingly adopting telematics, AI, and digital platforms to enhance customer experience and reduce operational costs. Meanwhile, insurtech startups, are disrupting the market by offering tech-driven, personalized insurance solutions and more flexible pricing models. The market is also seeing partnerships between traditional insurers and technology firms to leverage innovations like blockchain and machine learning. Overall, the competition is intensifying, with a focus on improving customer satisfaction, pricing accuracy, and efficiency.

The report provides a comprehensive analysis of the competitive landscape in the motor insurance market with detailed profiles of all major companies, including:

• American International Group Inc.
• Assicurazioni Generali S.p.A.
• AXA Cooperative Insurance Company (Gulf Insurance Company K.S.C.)
• Bajaj Allianz General Insurance Company Limited
• China Ping An Insurance Co. Ltd.
• Government Employees Insurance Company (Berkshire Hathaway Inc.)
• Reliance General Insurance Company Limited (Reliance Capital Limited )
• State Farm Mutual Automobile Insurance Company
• The Hanover Insurance Group Inc. (Opus Investment Management)
• The Progressive Corporation
• Universal Sompo General Insurance Company Limited
• Zurich Insurance Group Ltd.
   

Latest News and Developments:

• In November 2024, CRED and ACKO General Insurance have partnered to offer motor insurance to CRED members, featuring dynamic pricing based on credit scores. Members with scores above 750 will receive lower premiums. Insurance can be purchased, renewed, and managed through CRED Garage, which also offers pick-up and drop-off services for claim-related vehicles.
• In August 2024, Zuno General Insurance has launched a usage-based motor insurance product in India, where premiums are adjusted according to driving behavior monitored via a mobile app. This innovative offering, claimed to be the first of its kind in the country, allows premiums to fluctuate based on driving scores at policy renewal.
• In August 2024, ICICI Lombard has introduced the "Smart Saver Plus" add-on for motor insurance, ensuring repairs at preferred garages within 5 days with a 24-month warranty on repair quality. If delays occur, alternate travel arrangements are provided. The feature aims to improve service speed and customer convenience.
• In July 2024, Qover has launched its motor insurance solution in Ireland, enabling embedded insurance for car manufacturers and mobility providers across Europe. Expanding to 10 countries in 36 months, Qover aims to cover all European markets by 2025. The solution is designed to meet market needs and support user acquisition.
• In March 2024, Allianz rebranded its digital motor insurance business, Flow, to Allianz in the UK as part of a strategy to expand services. The insurance was available for direct purchase and through price comparison sites, with customizable coverage and added benefits. LV= Broker also rebranded to Allianz in May 2024.

Motor Insurance Market Report Scope:

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the motor insurance market from 2019-2033.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the global motor insurance market.
• The study maps the leading, as well as the fastest-growing, regional markets. It further enables stakeholders to identify the key country-level markets within each region.
• Porter's Five Forces analysis assists stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the motor insurance industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.