The motor insurance market in the Asia-Pacific region is projected to grow from US$227.1bn in 2019 to US$257.8bn in 2023, in terms of written premiums, according to GlobalData, a leading data and analytics company.
GlobalData’s insight report, ‘Global Motor Insurance Market 2020’, reveals that the motor insurance market in Asia-Pacific is expected to grow at a compound annual growth rate (CAGR) of 3.2% during 2019–2023, supported by increase in demand for new vehicle sales from the rapidly growing middle class population.
Deblina Mitra, Insurance Analyst at GlobalData, comments: “Despite the current slowdown in growth due to COVID-19 pandemic, several countries are showing signs of recovery with 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 year-on-year basis, indicating market recovery.”
Another key trend which can be observed in the motor insurance market is the pace of product innovations. New insurance products such as short-term car insurance and pay-as-you-go (PAYG) products are being offered by motor insurance companies to support sales at a time when car usage is low due to lockdown restrictions. For instance, insurance start-ups such as UbiCar, Real and Kogan in Australia are offering pay-as-you-go insurance policies.
Ms Mitra continues: “The premium for such policies is based on actual distance traveled, recorded via telematics device installed in the car. It provides greater flexibility as consumers will only pay insurance based on their actual usage resulting in lower premium.”
China-based insurer Ping An has a dedicated innovation division – Ping An Technology to gain efficiency in claims settlement and customer engagement. For instance, its ‘510 ultra-speed on-site city inspection’ launched in 2018 connects claims’ agents to accident site within 10 minutes. Furthermore, it provides claims management service using AI-based image-recognition technology. This requires picture of damaged vehicle to be uploaded, which then does loss assessment towards repair and other costs, within a minute.
Ms Mitra concludes: “Motor insurance industry is expected to see major changes over the next few years driven by technological developments. Further advancement in motor industry in the area of connected cars and driver assistance services has the potential to disrupt the motor insurance industry in the region.”
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