According to a new report published by Allied Market Research, titled, “EV Insurance Market Growth,” The ev insurance market was valued at $51.4 billion in 2021, and is estimated to reach $210.4 billion by 2031, growing at a CAGR of 15.5% from 2022 to 2031.
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Electric vehicle are the vehicles which are powered by an electric motor that draws electricity from a battery and is capable of being charged from an external source. With such high investment there comes risk. Therefore, most of the EV vehicle owners purchase or take the EV insurance service. EV insurance is a contract under which a person (the insured) receives financial protection from the insurer (the insurance firm) for damages he might incur in certain situations. In this insurance, the policyholder pays a certain amount called ‘premium’ to the insurance company against which the latter provides insurance cover.
Moreover, some upcoming EV insurance market trends include a shift towards usage-based insurance, increased focus on cybersecurity for connected vehicles, and a rise in the number of electric vehicle-specific insurance products. Additionally, there may be changes in liability laws as EVs become more prevalent, and insurance companies may also begin to take into account the unique maintenance needs of electric vehicles.
The electric vehicle (EV) insurance market is a rapidly growing and evolving industry. As the number of EVs on the road increases, the demand for electric car insurance is also increasing. This is due to the fact that EVs are more expensive to repair than traditional gasoline-powered vehicles. Furthermore, many insurance companies are beginning to offer specialized coverage options for EVs, such as battery replacement coverage and charging station damage coverage. In addition, some insurance companies are offering usage-based car insurance for electric cars, which means that the premium is based on how much the vehicle is driven. This allows for more personalized and accurate electric car insurance cost.
Furthermore, telematics and data analysis: Many insurance companies are using telematics and data analysis to better understand the driving habits and patterns of EV drivers. This allows for more accurate pricing and risk assessment.
Furthermore, major market players have undertaken various strategies to increase the competition and offer enhanced services to their customers. For instance, in December 2022, AXA, the global insurance provider, has launched the country’s first insurance product tailored to meet the specific needs of electric vehicles (EV) owners, making headway in the local EV market. The product offers specific EV insurance products, which have been approved by the Office of Insurance Commission (OIC). It offers full financial protection against damage to the EV vehicles.
On the basis of application, the personal segment is the highest growing segment. This is attributed to the fact that the personal segment is expected to experience significant growth in the coming years, owing to surge in demand for personal EV cars among consumers and rise in the production of total units of passenger cars globally as compared to commercial vehicles. Personal Vehicle insurance includes any kind of insurance a person buys to protect themselves, their families, or both. These insurance plans offer insurance type against a variety of personal risks that could result in severe financial losses due to things like fire, theft, natural catastrophes, death, accidents, lawsuits, and disease. These factors drive the growth of the EV insurance market size.
By region, Asia Pacific attained the highest growth in 2021. This is attributed to the fact that EV insurance market possesses highest potential growth owing to rise in usage of EV vehicles. Moreover, the growth of the market is attributed to supportive government policies and regulations, increasing investments by leading automotive OEMs, and decreasing prices of batteries. Increasing adoption of electric mobility in emerging economies and increasing EV and battery manufacturing capabilities in Southeast Asia provide lucrative growth opportunities for the EV insurance market.
The COVID-19 pandemic had a moderate economic impact on the EV insurance market growth. Moreover, the global EV insurance market has witnessed rise in growth after the COVID-19 pandemic, owing to the dramatically increased digital penetration. Furthermore, the rising advancements and unique identification for fast settlements, complete transactional security, and digital insurance services to the customers helps to drive the growth of the market during COVID. Furthermore, EV insurance industry has helped the financial industry to reinvent the customer relationships by identifying personalized needs and engaging with customers through hyper-personalized one-to-one contacts. Moreover, many banking and finance organizations offers the widest set of insurance solutions through video, voice and virtual reality technology, which helped to boost the market during pandemic. Therefore, the COVID-19 moderately impacted the EV insurance market.
Key Findings of the Study
- By coverage, the third-party liability coverage segment led the EV insurance market in terms of revenue in 2021.
- By distribution channel, the insurance agents/brokers segment accounted for the highest EV insurance market share in 2021.
- By vehicle age, the new vehicle segment accounted for the highest EV insurance market share in 2021.
- By region, Asia-Pacific generated the highest revenue in 2021.
The key players profiled in the EV insurance market analysis are ACKO General Insurance Limited, Allianz SE, Allstate Insurance Company, AXA, Bajaj Allianz General Insurance Company, Beinsure Digital Media, Esure, HDFC ERGO, Lemonade, Inc., Progressive Casualty Insurance Company. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
