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2021

Motor Vehicle Liability Insurance Market

Motor Vehicle Liability Insurance Market Size, Share, Competitive Landscape and Trend Analysis Report, by Mode, Distribution Channel, Vehicle Age and Application : Global Opportunity Analysis and Industry Forecast, 2021-2030

BI : Insurance

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Author's: Shadaab Khan| Beesetty Yogendra | Onkar Sumant
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Motor Vehicle Liability Insurance Market Outlook – 2030 

The global motor vehicle liability insurance market size was valued at $297.00 billion in 2020, and is projected to reach $667.75 billion by 2030, growing at a CAGR of 7.8% from 2021 to 2030. Motor vehicle liability insurance is a legally mandatory insurance in majority of the country, and is usually a part of the main car insurance policy. In addition, a separate comprehensive car insurance policy can also be added onto a motor vehicle liability insurance for protecting the driver. In addition, the insurance policy covers the insured person’s legal liability in case of death or disability to any third party, and any loss or damage to a third-party property. Thus, protecting the drivers from any criminal case in case of unintentional accidents.

Low cost of motor vehicle liability insurance and legal liability provided to the insured party positively impacts the growth of the motor vehicle liability insurance market. In addition, rise in stringent government regulation regarding liability insurance boost the growth of the market across the globe. However, factors such as rise in number of false claims and rise in social inflations are limiting the motor vehicle liability insurance market growth. On the contrary, advancements of technologies in big data, advanced analytics and artificial intelligence is expected to offer remunerative opportunities for the expansion of the motor vehicle liability insurance market during the forecast period.

Motor-Vehicle-Liability-Insurance-Market-2021-2030

By vehicle age, the new vehicles segment is expected to garner a significant share during the forecast period, owing to stringent government regulations making it compulsory for new vehicle owners to mandatorily buy a three-year or five-year long-term motor vehicle liability insurance for cars. However, the used vehicles segment is expected to witness growth at the highest rate during the forecast period, owing to rise in demand for old vehicles with customized models, limited budget for availing car insurance.

Region wise, the motor vehicle liability insurance market was dominated by North America in 2020 and is expected to witness the highest growth rate during the forecast period owing to economically emergent countries such as U.S. and Canada, which have large number of population using motor vehicles, which enhances the growth of the motor vehicle liability insurance market. 

In addition, rise in investment from the government in this region towards development of roads and runways is anticipated to boost the growth of the motor vehicle liability insurance market. However, Asia-Pacific is expected to witness significant growth during the forecast period, to owing to growing number of accidents from high speed cars in developing nation of Asia-Pacific such as China and India.

Motor Vehicle Liability Insurance Market
By Mode
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Offline segment will maintain the lead throughout the forecast period

The report focuses on growth prospects, restraints, and trends of the motor vehicle liability insurance market analysis. The study provides Porter’s five forces analysis to understand 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 motor vehicle liability insurance market share.

Motor Vehicle Liability Insurance Market
By Distribution Channel
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Direct Response segment will lead the market by the end of 2030 with a highest CAGR of 9.9%

Segment Overview

The global motor vehicle liability insurance market is segmented on the basis of mode, distribution channel, vehicle age, application, and region. Depending on mode, the market is segregated into offline and online. On the basis of distribution channel, it is categorized into independent agents/brokers, direct response, banks, and others. Depending on vehicle type, it is fragmented into new vehicle and old vehicle.  Based on application, the market is divided into personal and business. Region wise, the motor vehicle liability insurance market is analyzed across several regions such as North America, Europe, Asia-Pacific, and Latin America, Middle East & Africa (LAMEA).

Motor Vehicle Liability Insurance Market
By Vehicle Age
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New Vehicle segment will dominate the market during the forecast period

Competitive Analysis 

Key players operating in the global motor vehicle liability insurance industry include Allstate, AXA XL, Chubb Limited, Great American, Hiscox Ltd., Nationwide, Progressive Commercial, State Farm, The Hartford, and The Travelers Indemnity Company. These companies have adopted several strategies such as product launches, partnerships, collaborations, mergers & acquisitions, and joint ventures to strengthen their foothold in the global motor vehicle liability insurance market.

Motor Vehicle Liability Insurance Market
By Application
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Personal segment will generate the highest revenue during 2021 - 2030

COVID-19 Impact Analysis

The outbreak of COVID-19 has negatively impacted the growth of the global motor vehicle liability insurance market. This is attributed to the fact that travel restrictions by several countries have reduced the kilometers and usage of vehicles on road, which influences policyholders to seek for bailouts, reduced premiums, and refund on premiums. This has led to insurers freezing sales of new coverages for auto insurance. Furthermore, motor vehicle liability insurance is obligatory in many states. 

Motor Vehicle Liability Insurance Market
By Region
2030
North America 
Europe
Asia-Pacific
LAMEA

Asia-Pacific region would exhibit the highest CAGR of 10.0% during 2021 - 2030

However, owing to travel restrictions and fear of infection, the sale of cars has declined to more than 50%, which states a significant drop in auto insurance policies. This acts as a critical challenge faced by auto insurance providers. To rebound the insurance business, key players are introducing new strategies to enhance the customer experience and to improve their market share in the pandemic situation.

Top Impacting Factors

Low Cost of Motor Vehicle Liability Insurance 

Motor vehicle liability insurance is an insurance that covers damage to other vehicles or injuries to other people while driving, which in turn reduces the cost of the premium. Moreover, according to a survey, on average, customers can save nearly $1,500 when they buy minimum liability coverage instead of a policy that includes comprehensive and collision insurance and higher liability limits. In addition, with the introduction of usage-based insurance a good drive is able to save a lot of money of their yearly expenditure on insurance. 

Furthermore, with the rising costs of vehicles, many countries are mandating the use of vehicle insurance which in turn is driving the adoption of low-cost motor vehicle liability insurance among the middle-class family. In addition, with the growth in number of internet users, many insurers are now able to directly provide insurance policy to the customers which in turn in reducing the need for any intermediators fees for brokers. Moreover, motor vehicle liability insurance are easily accessible online and it is also possible to get them renewed online, which is a major factor driving the growth of the motor vehicle liability insurance market.

Increase in Government Rules & Regulations

Many countries across the globe have released various laws to protect people and property from reckless drivers and to provide compensation which id propelling the growth of the market. For instance, in 2019, the ministry of road transport and highway together with the insurance regulatory and development authority of India (IRDA) launched the motor vehicles act, to improve loss prevention and minimization. In addition, the premium amount for different category of motor vehicles is notified by the IRDA. 

In addition, with rise in number of accidents and low compensations to the third party many countries have started updating the law regarding accident liability, which in turn is driving the growth of the market. For instance, in November 2019, the UK government tightening insurers’ ability to avoid liability to third party victims under the Road Traffic Act (RTA). With this all the drivers will be enacted to avail vehicle liability insurance for paying the liability to the injured. Thus, growing number of such regulations fuels the growth of the motor vehicle liability insurance market.

Key Benefits For Stakeholders     

  • The study provides an in-depth analysis of the motor vehicle liability insurance market forecast along with the current trends and future estimations to explain the imminent investment pockets.
  • Information about key drivers, restraints, & opportunities and their impact analysis on the global market is provided in the report.
  • Porter’s five forces analysis illustrates the potency of the buyers and suppliers operating in the industry.
  • The quantitative analysis of the motor vehicle liability insurance market trends from 2021 to 2030 is provided to determine the market potential.

Motor Vehicle Liability Insurance Market Report Highlights

Aspects Details
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By Mode
  • Offline
  • Online
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By Distribution Channel
  • Independent Agents/Brokers
  • Direct Response
  • Banks
  • Others
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By Vehicle Age
  • New Vehicle
  • Used Vehicle
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By Application
  • Personal
  • Commercial
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By Region
  • North America  (U.S, Canada)
  • Europe  (Germany, France, UK, Italy, Spain, Belgium, Rest of Europe)
  • Asia-Pacific  (China, Japan, India, Australia, South Korea, Indonesia, Rest of Asia-Pacific)
  • LAMEA  (Latin America, Middle East, Africa)
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Key Market Players

Allstate, Progressive Commercial, State Farm, Nationwide, The Hartford, The Travelers Indemnity Company, Hiscox Ltd., AXA XL, Chubb Limited, Great American

Analyst Review

The adoption of motor vehicle liability insurance solutions has increased over the years to help organizations to cover liability of the owner of the vehicle as well as to cover the liability of the other person. Furthermore, the type of coverage and the amount of premium depends on the type of damage that is being covered by the policy. Some policies even provide property coverage for the vehicle that damage the surroundings, which in turn is expected to drive the growth of the market.

Key providers of motor vehicle liability insurance market such as Allianz, American International Group Inc., and AXA account for a significant share in the market. For instance, in November 2020, AXA XL partnered with Xtract, to automate, accelerate, and revolutionize the commercial vehicle claims management process in the U.S. It will also enable the claims team to quickly gather and evaluate all data that is available on an incident, vastly speeding up decision-making process while also offering superior customer service to brokers and clients.

Furthermore, many insurance agencies are collaborating with tech companies to enhance their existing AI system for better security and to upsurge the performance of the system. For instance, in January 2021, State Farm Mutual Automobile Insurance Company, America’s largest property and casualty insurance provider acquired GAINSCO, Inc., a leading provider of non-standard motor vehicle liability insurance products. The acquisition will help State Farm to becoming a nationwide leader in the fastest growing segment of the motor vehicle liability insurance market.

Moreover, insurance providers are innovating and developing various solution to provide diverse solutions to the end users. For instance, in January 2021, The Hartford and Tractable started development of the product to analyses auto damage in its motor vehicle liability insurance claims processes in the U.S., with the goal of reducing paper work and to upgrade the system to use Tractable’s AI technology for managing claim processes. Their arrangement involves The Hartford using Tractable’s AI technology to analyze auto damage within its U.S. motor vehicle liability insurance claims operations, with a goal of accelerating how quickly claims can be processed for its customers. Thus, growing number of such developments across the globe is expected to drive the growth of the market.

 

Author Name(s) : Shadaab Khan| Beesetty Yogendra | Onkar Sumant
Frequently Asked Questions?

The Motor Vehicle Liability Insurance Market is estimated to grow at a CAGR of 7.8% from 2021 to 2030.

The Motor Vehicle Liability Insurance Market is projected to reach $667.75 billion by 2030.

To get the latest version of sample report

Low cost of motor vehicle liability insurance and legal liability provided to the insured party etc. boost the Motor Vehicle Liability Insurance market growth.

The key players profiled in the report include Allstate, AXA XL, Chubb Limited, Great American, Hiscox Ltd., and many more.

On the basis of top growing big corporations, we select top 10 players.

The Motor Vehicle Liability Insurance Market is segmented on the basis of mode, distribution channel, vehicle age, application, and region.

The key growth strategies of Motor Vehicle Liability Insurance market players include product portfolio expansion, mergers & acquisitions, agreements, geographical expansion, and collaborations.

Asia-Pacific region would grow at a highest CAGR of 10.0% during the forecast period.

Direct Response segment will dominate the market by the end of 2030.

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Motor Vehicle Liability Insurance Market

Global Opportunity Analysis and Industry Forecast, 2021-2030