Market Overview:
The global market for Electric Vehicle Insurance estimated at USD 61.10 Billion in 2022 is projected to reach a revised size of USD 285.05 Billion by 2030, growing at a CAGR of 21.23% over the period 2023-2030.
Electric vehicle insurance is a specialized form of motor insurance, serving as a contractual safeguard between electric car owners and insurers. This agreement shields electric vehicles from diverse potential risks, encompassing natural disasters, accidents, theft, and fires. The soaring popularity of electric cars has led to a parallel surge in electric vehicle insurance adoption. This insurance category not only extends financial protection for new electric vehicle purchases but also mitigates the substantial expenses associated with battery replacement and limited repair infrastructure. With batteries contributing significantly to costs, repairing or replacing electric vehicle components can prove financially burdensome.
Electric vehicle insurance steps in with prompt damage recovery, covering repair or replacement costs for affected parts and addressing losses arising from road accidents. Amid mounting concerns about global warming, governments endorse electric vehicle adoption and the insurance sector that supports it. The escalating preference for electric vehicles, driven by continuous fuel price hikes, has prompted numerous insurers to introduce tailored electric vehicle insurance products, fuelling market expansion.
Top Key Players for Electric Vehicle Insurance Market:
Allianz, Allstate, Aviva, AXA, Direct Line, Ford, General Motors, Hyundai, Mercedes-Benz, Ping An Insurance, Stellantis, Tesla, Toyota, Travelers, Volkswagen, Zurich Insurance, Zhejiang Geely, and Other Major Players.
Market Dynamics and Factors for Electric Vehicle Insurance Market:
Drivers:
Rapid Global Surge in Electric Vehicle Demand and Sales
The robust surge in global electric vehicle demand is a pivotal driver for Electric Vehicle Insurance Market. In 2022, over 10 million electric cars were sold worldwide, with projections indicating a 35% growth this year to reach 14 million units. Electric cars' market share has escalated from 4% in 2020 to 14% in 2022 and is anticipated to advance further to 18% this year. China, Europe, and the United States dominate sales, yet emerging markets like India and Indonesia exhibit promising growth due to effective policies and investments. Electric mobility, notably in two- or three-wheel vehicles, underscores sustainable development in developing economies.
Opportunities:
The Insurance Sector's Emphasis on Creating Specialized Policies
The insurance industry's strategic focus on the development of diverse and specialized policies presents a significant opportunity, particularly in the context of electric vehicles, as insurers can tailor innovative coverage solutions to address the specific needs and evolving risks associated with electric car ownership, such as battery-related expenses, charging infrastructure, and technology-driven vulnerabilities. This proactive approach not only attracts a growing base of electric vehicle owners seeking comprehensive coverage but also positions insurance companies at the forefront.
Segmentation Analysis of the Electric Vehicle Insurance Market:
By Insurance Plan, The Electric Vehicles reflect a prominent preference for Third Party Insurance Plans, showing their dominance within the insurance landscape. This prevalent choice among vehicle owners is substantiated by a substantial market share and widespread adoption. Third Party Insurance Plans emerge as a clear frontrunner, underscoring their pivotal role in shaping the insurance paradigm within the electric vehicle sector.
Regional Analysis of the Electric Vehicle Insurance Market:
The Asia Pacific region stands out as a dominant force within the electric vehicle insurance market, propelled by its remarkable surge in electric vehicle adoption, as exemplified by the projected revenue of US$292.1 billion in China alone for 2023. With a significant share of the market's revenue, the region's influence is further underscored by the robust growth projections, including an expected market volume of US$428.2 billion by 2028 and a substantial 9.3 million vehicle unit sales in 2028, emphasizing its central role in shaping the global landscape of electric vehicle adoption and market expansion. With a substantial increase in the number of electric car owners, there is a growing necessity for insurance solutions customized to the unique challenges and intricacies inherent in electric vehicle ownership.
Key Industry Development:
In October 2022, Large insurers, such as Bajaj Allianz General and HDFC ERGO announced that they will offer specialized services for electric cars as also information to prospective electric car buyers. They will focus on protection aspect.
