The motor insurance industry in Asia-Pacific is projected to grow at a compound annual rate of 5.6%, rising from $229.2 billion in 2024 to $301.7 billion by 2029, according to new data from analytics firm GlobalData. This growth is expected to be fueled by rising vehicle sales—especially electric vehicles (EVs)—as well as ongoing regulatory reforms and digital transformation in the insurance sector.
China, Japan, Australia, South Korea, and India will continue to dominate the regional market, contributing 92% of all motor insurance premiums in 2024. In 2025 alone, the industry is forecast to grow by 5.6%, supported by government subsidies for EVs, stricter carbon emissions policies, tariff adjustments, and the increasing use of artificial intelligence and digital tools throughout the insurance value chain.
To meet the needs of a growing EV market, insurers are launching tailored policies to address unique risks associated with electric vehicles. Governments in Taiwan, Singapore, and China are also rolling out EV-specific insurance regulations, helping to boost demand. In a notable move, Chinese EV manufacturer BYD entered the insurance market in May 2024 after acquiring a licensed insurer, allowing it to offer in-house motor liability policies—a step reflecting a broader trend of automakers integrating insurance offerings.
The shift toward new energy vehicles (NEVs) is reshaping underwriting practices. In China, NEVs made up a third of all vehicle sales in 2023. As this share increases, insurers are turning to data analytics to fine-tune pricing models and improve risk assessments. However, strict regulation around premium pricing remains a key challenge to maintaining profitability.
Usage-based insurance products such as pay-as-you-drive (PAYD) are gaining popularity in markets like South Korea, Singapore, Malaysia, and India. These flexible plans offer lower premiums based on driving habits and mileage, helping insurers navigate rising costs while appealing to price-sensitive consumers. Meanwhile, planned regulatory changes—such as Indonesia’s proposed mandate for motor third-party liability insurance and Malaysia’s push for greater EV adoption—are expected to further drive market expansion. Despite pricing constraints, GlobalData analyst Swarup Kumar Sahoo believes profitability will be supported by moderate rate increases, disciplined underwriting, and strategic industry partnerships.
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