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In many countries, motor insurance stands as the main line of business and the leading source of premiums. With the number of vehicles insured on the rise and insurance rates increasing steadily, the motor insurance market continues to grow.
New technologies, in particular the rise of artificial intelligence and the development of electric and connected cars, are further boosting this business, which is in the midst of a revolution.
Strategic adjustments are already being made by the various players, who have no choice but to adapt to the new realities of the market.
Motor Insurance Market Size
In 2023, the global motor insurance market generated 1920 billion USD in premiums, that is 26.7% of premium income from all lines of business combined and 44.6% of non-life underwriting. This turnover gives the motor insurance business substantial economic weight within the insurance industry.
Between 2017 and 2023, the market grew by 22%. This growth is particularly driven by:
- the increase in the number of vehicles on the road,
- increasing urbanization,
- rising living standards in emerging countries,
- consideration of new risks such as those associated with climate change and the rise of electric and connected vehicles,
- the emergence of new technologies that enable insurers to better assess risks, thus offering products that are better tailored to policyholders' needs.
Global motor insurance market turnover
With the exception of 2020, severely impacted by the Covid-19 pandemic, motor industry contributions for the period 2017-2024 have evolved steadily. During the health crisis, vehicle movements were limited, especially after the massive use of remote work. This restriction in mobility led to a fall in the number of motor claims worldwide, and consequently to a decline in premiums.
For the period 2024-2028, growth in the motor insurance segment is expected to accelerate to an average annual rate of around 9%. This market growth is not uniform, however. It depends, among other elements, on:
- the size of the local market,
- the level of local development of the industry,
- population density,
- the level of car ownership,
- motor insurance regulations,
- the level of economic development in each country,
- the level of integration of new technologies at local level.
Read also | Trends in the global motor insurance market
Motor insurance's position in different markets
Given their different economic, social and regulatory contexts, the share of motor insurance in each life and non-life market varies considerably from one country to another. It ranges from 5% in the UK to 42% in Turkey.
Motorization rates, household purchasing power, road density and compulsory insurance regulations all have a strong influence on the penetration of motor insurance in each market.
Despite steady growth in motor premiums over the past few years, the weight of this line of business in local portfolios is very often declining.
The biggest declines were recorded by Oman, the USA, Angola, Saudi Arabia and Algeria, whose market shares for 2018 - 2023 fell by 11, 8, 8, 8 and 7 points respectively.
This decrease is largely due to regulatory reforms, competition from new players and the development of other lines of business, particularly life and other property risks.
Motor insurance by market: 2018-2023
| Country | 2018 | 2023 |
|---|---|---|
| South Africa | 48% | 41% |
| Saoudi Arabia | 17% | 9% |
| UAE | 28% | 27% |
| Morocco | 13% | 12% |
| Lebanon | 28% | 22% |
| Algeria | 22% | 22% |
| Kenya | 26% | 27% |
| Egypt | 15% | 16% |
| Jordan | 9% | 10% |
| Kuwait | 14% | 15% |
| Bahrain | 20% | 23% |
| Ghana | 10% | 7% |
| Tanzania | 12% | 12% |
| Cameroon | 38% | 35% |
| Angola | 21% | 15% |
| Burkina Faso | 23% | 19% |
| Mauritius | 22% | 20% |
| Oman | 16% | 16% |
| Germany | 27% | 25% |
| France | 31% | 20% |
| United Kingdom | 10% | 31% |
| Spain | 30% | 22% |
| Belgium | 7% | 8% |
| Turkey | 17% | 16% |
| Russia | 29% | 25% |
| China | 43% | 42% |
| Japan | 15% | 10% |
| India | 5% | 5% |
| United States | 49% | 41% |
Source: Atlas Magazine
Read also | Challenges facing the motor insurance market
Global motor insurance: average 2023 annual premium
The average cost of a motor insurance policy covering both compulsory and optional risks varies considerably from country to country. Developed countries tend to have higher premiums, due to the high cost of health care and vehicle repairs.
Additionally, “comprehensive” and optional motor insurance are more popular in mature countries than in emerging markets. In the latter, simple third-party liability policies are commonplace.
According to a study by Forbes Advisor, the average annual cost of a compulsory third-party liability policy in the USA was 638 USD in 2023, while extended coverage for optional risks can reach 3800 USD. The same liability premium is estimated at 230 USD in South Africa, while comprehensive coverage is 917 USD. In Saudi Arabia, the average annual cost of a third-party liability policy is estimated at 280 USD, compared with 1 266 USD for optional vehicle damage coverage.
