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A47384 | Pages: 396 | Charts: 57 | Tables: 147 |
The global ev insurance market was valued at $51.4 billion in 2021, and is projected to reach $210.4 billion by 2031, growing at a CAGR of 15.5% from 2022 to 2031.
Electric car insurance is a type of motor insurance which is there to protect electric cars from a number of potential damages and losses, such as those that might happen in the case of accidents, natural calamities, or fire. Electronic Vehicle Insurance (EV insurance) is a new type of motorized vehicle insurance for cars and other electric vehicles. It covers bills and expenses during vehicle breakdowns and insures the vehicle against damage, theft, etc. The growing availability of electric vehicles (EVs) has created new opportunities for insurers to develop products tailored to the policies of EVs. Electronic Vehicle Insurance (EV insurance) is one example of this concept, providing motorists with vehicle coverage.
The spread of internet access to every corner of the globe has resulted in a surge in the online segment which has facilitated a rapid growth prospect for the EV insurance. In the twenty-first century, smartphones have also become an indispensable part of many people's lives. The increasing use of devices such as smartphones and tablets, as well as access to the internet via 4G, 5G, and other technologies, has accelerated the adoption of digital technology.
Moreover, Surge in demand for EV vehicle insurance and several instances of electric bikes and cars catching fire have come to light in recent months but there is no stopping this vehicle segment from picking up speed. Though it is still at a nascent stage therefore, general insurance companies are turning their attention to the segment, recognizing its growing potential. Therefore, these are some of the factors that propel the growth of EV insurance market.
However, enforcement of strong rules by banks and financial institutions for providing vehicle finance has put up a strong restriction. This restriction has been implemented by a number of banks and financial service providers to offer car finance services, which restricts the growth of the market across the globe. On the contrary, there has been a significant increase in the awareness about the importance of insurance policies among the customers. Many banks and financial institutions, can leverage on this opportunity by offering various types of EV vehicle insurance policies to the customers.
The report focuses on growth prospects, restraints, and trends of the EV insurance market analysis. The study provides Porter’s five forces analysis to understand the impact of various factors, such as bargaining power of suppliers, competitive intensity of competitors, threat of new entrants, threat of substitutes, and bargaining power of buyers, on the EV insurance market.
The EV insurance market is segmented on the basis of coverage, distribution channel, vehicle age, application, and region. By coverage, it is segmented into first party liability coverage, third party liability coverage, and others. By distribution channel, it is bifurcated into, insurance companies, banks, insurance agents/ brokers, and others. On the basis of vehicle age, the EV insurance market is segmented into new vehicle and used vehicle. By application, it is segmented into personal and commercial. By region, it is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
[COVERAGEGRAPH]
By coverage, the third-party liability coverage segment attained the highest growth in 2021. This is attributed to the fact that third-party liability coverage is a statutory requirement under the Motor Vehicles Act. It is compulsory to buy for both new and old vehicle owners at the time of registration of vehicles, which acts as a key factor driving the growth of the global EV insurance market. Moreover, this factor significantly contributes toward the growth of the market. As the third-party insurance cover is mandatory, all non-life insurance companies have an obligation to provide this cover, which propels the market growth, globally.
[REGIONGRAPH]
By region, Asia Pacific attained the highest growth in 2021. This is attributed to the fact that EV insurance market possesses highest potential growth owing to rise in usage of EV vehicles. Moreover, the growth of the market is attributed to supportive government policies and regulations, increasing investments by leading automotive OEMs, and decreasing prices of batteries. Increasing adoption of electric mobility in emerging economies and increasing EV and battery manufacturing capabilities in Southeast Asia provide lucrative growth opportunities for the EV insurance market.
The report analyzes the profiles of key players operating in the EV insurance market such as ACKO General Insurance Limited, Allianz SE, Allstate Insurance Company, AXA, Bajaj Allianz General Insurance Company, Beinsure Digital Media, Esure, HDFC ERGO, Lemonade, Inc., Progressive Casualty Insurance Company. These players have adopted various strategies to increase their market penetration and strengthen their position in the EV insurance market.
Over the past two years, the coronavirus epidemic has moderately affected the insurance sector. With the aid of latest technology, insurers can use data from IoT devices such as the various components of smart homes, automobile sensors, and wearable technologies to better determine rates, mitigate risk, and even prevent losses in the first place. Moreover, with an increasing focus on personalized premiums and usage-based coverage, insurers are leveraging Internet of Things, advanced analytics and machine learning to develop more granular individual risk profiles. In addition, collaboration between traditional insurance and InsurTech firms will give rise to newer models and revenue streams, higher profitability and reduced operational costs for EV insurance industry.
Furthermore, digitalized workplaces and simplified operations along with accelerated performance are expected to drive the growth of the global EV insurance market over the forecasted period. In addition, companies' companies who are providing EV insurance services are continuously attempting to reduce their capital expenditures and operational costs. Because of the current competitive environment and global economic crisis, the adoption of cost-effective strategies for restructuring existing business models has increased. Therefore, these are the major market trends of EV insurance market.
The spread of internet access to every corner of the globe has resulted in a surge in the online segment which has facilitated a rapid growth prospect for the EV insurance. In the twenty-first century, smartphones have also become an indispensable part of many people's lives. The increase in use of devices such as smartphones and tablets, as well as access to the internet via 4G, 5G, and other technologies, has accelerated the adoption of digital technology.
Moreover, banking firms and financial institutions are turning to cloud oriented software, as the software keeps businesses up to date on transactions automatically, to streamline daily operations and gain access to data from anywhere. According to the article published by InsurTech, in January 2022, there are many different ways insurers can use the cloud to improve their business which is platform hosting, data storage and backup, marketing campaign and ERP. Therefore, rise in penetration of the internet and mobile devices across the world is expected to drive the growth of the EV insurance market during the forecast period.
Several instances of electric bikes and cars catching fire have come to light in recent months but there is no stopping this vehicle segment from picking up speed. Though it is still at a nascent stage therefore, general insurance companies are turning their attention to the segment, recognizing its growing potential. Moreover, large insurers, such as Bajaj Allianz General and HDFC ERGO, have set up dedicated portals that offer specialized services for electric cars as also information to prospective electric car buyers. Moreover, in response to an increase in the amount of EV purchases, EV vehicles insurance in developing nations like Japan, India, Hong Kong, and others is experiencing rapid growth, which is opportunistic for the growth of the EV insurance market demand.
Furthermore, it is no surprise that they are quickly becoming the new-age modes of transportation, with perks like noiseless driving, pollution-less commuting, and added savings from cutting out petrol and diesel use. Nevertheless, the perks come at an additional cost to the vehicle owner. For instance, as these vehicles are built with advanced technology, their repair also necessitates hiring specialists and an increase in repair costs in case of damage. Similarly, the batteries of these cars or bikes and other specialized parts are expensive, implying a high replacement cost. Therefore, in that case, having an EV vehicle insurance policy in place can save the consumer from hefty charges. if there is any damage or depreciation. Thus, this factor helps to drive the global EV insurance market.
Strong restrictions have been implemented by a number of banks and financial service providers to offer car insurance for electric cars, which restricts the growth of the market across the globe. Vehicle finance providers have been demanding several documents to deliver lending services, which include owner’s bank account statement, credit score document, historical information of property, and no criminal cases document. Thus, this factor hampers the EV insurance market growth.
The electric car insurance cost is high as it is made up of advance technology and also helps reduce the pollution in the globe. There come difficulties for the individuals to buy such EV cars, which leads to less sales of the EV insurance with such advent function in EV vehicles. Moreover, in most of the countries there is no proper facility of the charging stations which indeed leads to less purchasing of the EV vehicles; thus, this factor hampers the market growth. In addition, the maintenance of such vehicles which requires huge investment amount and such huge cost cannot be afforded by most of the individuals. Therefore, these factors limit the growth of the EV insurance market size.
There has been a significant increase in the awareness about the importance of insurance policies among the customers. Many banks and financial institutions, can leverage on this opportunity by offering various types of EV vehicle insurance policies to the customers. Furthermore, banks are partnering with insurance companies to provide EV insurance policies to increase their customer satisfaction and with the rise in demand for insurance policies, insurance companies are approaching banks to sell their products to the customers. Therefore, the demand for EV insurance services will also increase in the upcoming years, with the growing demand for EV vehicles policies among customers. Thus, this is projected to provide major lucrative opportunities for the growth of the EV insurance market share.
Key Market Segments
Key Market Players