Auto Insurance Market Growth Fueled Due to Rise in Global Vehicle Sales and the Compulsion to Buy Insurance While Purchasing New Vehicle

Radiant Insights, Inc.

SAN FRANCISCO, July 23, 2018 /PRNewswire/ --

Global Auto Insurance Market is predicted to grow considerably in the forecast period due to the rise in the per capita income of the consumers worldwide. Auto insurance is a policy for automobiles. It covers any financial risk that can emerge while driving the vehicle. It is primarily used to offer financial protection against road mishaps, medical payments, comprehensive coverage, uninsured or underinsured motorist coverage and injury protection. In short an insurance company covers losses caused from damages, theft, or accidents. The rise in global vehicle sales due to increase in per capita income of consumers and the compulsion to buy insurance while purchasing new vehicle are proved catalysts in the growth of auto insurance market. Lucrative and innovative product introductions are predicted to stimulate the market growth in near future. The prominent market players in insurance sector offer several add-on covers which is expected to impact the insurance sales positively and ultimately boost the market growth.

The growing road mishaps owing to increased traffic are another reason for the growth of auto insurance market. Nevertheless, the rise in vehicle rental services, market fragmentation and adoption of driverless or autonomous vehicles are reducing the need for auto insurance in forecast period which is a major obstacle for the auto insurance market. Auto insurance market is also gaining popularity due to implementation of enhanced analytics tools to reduce fake claims. The improved tools like big data analytics and geospatial analytics are the right tools for insurance companies to reduce losses caused by fraud claims. Other contributing factors to auto insurance market comprise growing costs of vehicle repairs, high cost of claims and unsafe driving practices due to which policyholders are doubtful to see a soft market in the near future. The growing employment rate and the decreasing gasoline prices are expected to rise the number of road mishaps and lead to higher expenses which ultimately increases the need for insurances. The rise in insurance claims which is also known as claim severity, is driven by factors like increase in auto repair, medical aid and auto parts.