The motor insurance market in the Asia-Pacific region is predicted to jump from US$227.1 billion in 2019 to US$257.8 billion in 2023 despite the impacts of the COVID-19 pandemic on the industry, according to GlobalData.
GlobalData’s Global Motor Insurance Market 2020 report suggests the motor insurance market in Asia-Pacific will expand at a compound annual growth rate (CAGR) of 3.2% from 2019 to 2023, thanks to increasing demand for new vehicle sales from the middle-class population.
“Despite the current slowdown in growth due to the COVID-19 pandemic, several countries are showing signs of recovery with a resumption in economic activity. China, which accounts for 50% of the region’s motor insurance market, registered 16.4% growth in new vehicle sales in July 2020 on a year-on-year basis, indicating market recovery,” said Deblina Mitra, an insurance analyst at GlobalData.
The report also highlighted the rise of product innovation to support motor insurance sales amid the pandemic, including short-term car insurance and pay-as-you-go (PAYG).
“The premium for such policies is based on actual distance travelled, recorded via telematics devices installed in the car. It provides greater flexibility as consumers will only pay insurance based on their actual usage resulting in a lower premium,” Mitra said.
“The motor insurance industry is expected to see major changes over the next few years driven by technological developments. Further advancement in the motor industry in the area of connected cars and driver assistance services has the potential to disrupt the motor insurance industry in the region.”
