India Car Insurance Market Gearing Up for Next Level of Growth: Growing at a CAGR of 8.0% by 2028

Published | 01 January 2022

India car insurance market is growing at a high CAGR because of the increasing private car ownership along with the growing popularity of cab services in the country.  The growth of the market is also driven by favorable government policies requiring vehicle insurance for vehicles running in public places….

A recent study conducted by the strategic consulting and market research firm BlueWeave Consulting revealed that the India car insurance market is estimated to grow at a CAGR of 8.0% during the forecast period (2022-2028). India’s car insurance market is one of the fastest-growing sectors in the country due to the increasing private car ownership, along with flourishing cab services in the country. Additionally, government policies that make it mandatory for the vehicles running in public spaces to have car insurance act as one of the major driving factors for the India car insurance market. Furthermore, the growing adoption of InsurTech and digitization in the insurance sector, combined with partnerships between car companies and financial service providers to expand insurance's accessibility among the general population, is expected to present lucrative growth prospects to the country’s car insurance market during the forecast period.

Growing Financial Literacy in India Favoring Car Insurance Adoption in the Country

For the past several decades, the lack of adequate resources to educate the public about the benefits of car insurance, or the companies that provide car insurance, and the types of policies available, have led to losses in the industry. However, with the increasing penetration of smartphones and easy access to information through Google, consumers are becoming more knowledgeable about financial jargons. These internet resources are used by the younger demographic to search and compare the best car insurance policies for their own benefit, which will drive the market growth in the forecast period.

Increasing Adoption of Insurtech is Anticipated to Drive the India Car Insurance Market During the Forecast Period

The growing digitization and increasing adoption of Insurtech are providing lucrative growth opportunities to the India car insurance market. Insurance companies are implementing advanced technologies to increase consumers' access to insurance policies. They are establishing partnerships with financial service providers to implement technologies such as artificial intelligence, the internet of things, and blockchain into their operations. For instance, in November 2021, PhonePe and Liberty General Insurance announced a partnership to offer motor insurance digitally.

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India Car Insurance Market - By Application

Based on applications, the India car insurance market is grouped into commercial and personal segments. Personal car insurance accounts for the highest market share due to the requirement by law to have cars insured under the Motor Vehicle Act of 1988. In addition to an increase in disposable income and private vehicle ownership, there is expected to be a boost in the personal car insurance segment over the next few years. However, the commercial segment is expected to grow at the fastest rate during the forecast period due to the emergence of cab services, such as Ola Cabs and Uber.

India Car Insurance Market - Regional Insights

Geographically, the India car insurance market is segmented into North India, South India, East India, and West India. Among these regions, South India dominates the India car insurance market. However, North India is also emerging as the potential region for growth due to the wide untapped market. While Tamil Nadu in Southern region of India tops the rank of highest road accidents in the country, Uttar Pradesh in North India reports the highest number of deaths owing to road accidents. As a result, car owners are increasingly opting for car insurance to protect themselves from financial losses.

Impact of COVID-19 on India Car Insurance Market

The growth of the car insurance market was initially negatively impacted by the sudden outbreak of the COVID-19 pandemic in the country. As a result of mobility restrictions and declining purchasing power of customers, sales of private and commercial cars dropped significantly. However, the market is anticipated to flourish in the post-COVID-19 period as the demand for private vehicles is anticipated to surge due to the preference of private transport over public transport due to safety and social distancing issues. Additionally, Insurtech and financial services such as Paytm and PhonePe enable easy access to car insurance through company websites and financial institutions, a trend that is proving beneficial to the car insurance mark

India Car Insurance Market - Competitive Landscape

The leading players in the India car insurance market are Bajaj Allianz Car Insurance, Chola MS Car Insurance, Bharti AXA Car Insurance, Digit Car Insurance, Edelweiss Car Insurance, Future Generali Car Insurance, Kotak Mahindra Car Insurance, Liberty Car Insurance, Reliance Car Insurance, SBI Car Insurance, Tata AIG Car Insurance, and other prominent players.

The market is highly fragmented due to the presence of leading and established industry players. The car insurance companies in India offer various types of policies to suit customers’ needs and diversify their consumer base. They also offer their policies at different premium rates to target different income groups in India, thereby boosting their sales and revenue. Furthermore, the insurance companies also adopt various organic and inorganic market strategies, such as partnerships, collaborations, and joint ventures, along with advertisement and marketing to expand their market presence.

Don’t miss the business opportunity of the India car insurance market. Consult our analysts to gain crucial insights and facilitate your business growth.

The in-depth analysis of the report provides information about growth potential, upcoming trends, and statistics of the India car insurance market. It also highlights the factors driving forecasts of total market size. The report promises to provide recent technology trends of the India car insurance market and industry insights to help decision-makers make sound strategic decisions. Furthermore, the report also analyses the growth drivers, challenges, and competitive dynamics of the market.

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