Mobility Insurance Market to $1.38 Trillion by 2030

The mobility insurance market is set to double globally, reaching a combined value of $1.38 trillion by the year 2030, global research firm Capgemini said in its 'World Property Casualty Insurance 2023' report.

Of the total mobility insurance market, the premiums collected through the traditional market stood at $0.58 trillion in 2021, the report said, adding that the same is estimated to rise to $0.81 trillion by 2030.

On the other hand, the premiums mopped up through the autonomous, connected, electric and shared (ACES) market, which stood at $0.07 trillion in 2021, is expected to soar sharply to $0.57 trillion by 2030, it added.

"As the definition of mobility expands, the mobility insurance market is poised to double from $0.65 trillion in 2021 to $1.38 trillion in 2030," Capgemini said.

The report is based on data drawn from 22 key markets across the world, including India, Australia, the United Kingdom, the United States, China, Mexico, Hong Kong and a slew of European countries, among others.

As per the report, the automotive industry is on the cusp of "profound change". Revenues are on track to reach $3.8 trillion by 2030, up 35 percent from 2020, it said.

In the next seven years, autonomous, connected, and electric vehicles may comprise about 40 percent of the market, up from 10 percent in 2020, the report added.

The nominal premiums in the ACES category, based on real-time data, will "grow eightfold to more than half a trillion US dollars, according to our analysis", Capgemini said.

The shift towards ACES category will be fuelled by the change in customer behaviour. According to Capgemini's customer survey, which included 5,990 policyholders from 19 global markets – "66 percent of participants said they were both interested in and supportive of connected and alternate energy vehicles. And 49 percent expressed enthusiasm for autonomous vehicles."

Survey responses suggest that the adoption of micro-mobility, shared vehicles, and multi-modal transportation solutions will double by 2025, accelerated by increased demand from urban customers, it added.

As the mobility market evolves, carriers will shift from insuring assets to protecting mobility journeys by launching new business models focused on personalisation.

"In fact, 42 percent of policyholders want a single policy that covers them irrespective of their mode of transportation," the report stated.

Industry veterans whose views were shared by Capgemini suggested that customers are increasingly looking beyond the traditional insurance coverage, and that insurers need to focus on "embedded solutions", keeping in mind the changing customer sentiment.

"Future-focused mobility solutions are disrupting traditional coverage as policyholders demand embedded protection for their journey," said Laurent Floquet, CEO, Mobility & Assistance, Allianz Partners.

"As insurers think about embedded solutions, they should consider how core value propositions align with embedded opportunities and how economies of scale can be leveraged to create better point of sale, servicing, and claims experiences," added Mike Kish, the Head of Corporate and Business Development at American insurance major State Farm. 

India Insights 

India is expected to adopt innovative mobility options faster than other countries, with 86% of Indian respondents showing an interest in connected and alternative energy vehicles, and 73% expressing interest in autonomous vehicles, while globally, the numbers stand at 66% and 49%, respectively. 

However, country's insurance players consider technology capabilities and competition as the key challenges in their journey towards the future of mobility, according to Capgemini.

Insurers will need to address customers' demands for innovative mobility coverage options, with 40% of Indian respondents expressing the desire for a singular coverage plan that would cover all risks related to mobility, the report highlighted.

"Overall, Indian insurers are marginally ahead in terms of value chain maturity but must continue to adapt to the evolving landscape of the future of mobility, " it added.