The Asia-Pacific motor insurance industry is poised for robust growth, with analytics firm GlobalData projecting a 5.6% compound annual growth rate (CAGR) from 2024 to 2029. This trajectory will lift the market’s value from $229.2 billion in 2024 to **$301.7 billion by 2029**, fueled by surging vehicle sales—particularly of electric vehicles (EVs)—regulatory reforms, and technological advancements reshaping the insurance landscape .
Regional Dominance and Growth Catalysts
China, Japan, Australia, South Korea, and India will remain the key drivers, collectively accounting for 92% of regional motor insurance premiums in 2024. In 2025 alone, the sector is expected to expand by 5.6%, supported by:
EV subsidies and carbon policies: Governments are incentivizing EV adoption through rebates and stricter emissions regulations, with China aiming for NEVs to comprise 40% of new car sales by 2025 .
Tariff adjustments: Policy changes, such as Malaysia’s service tax hike on motor insurance from 6% to 8% in March 2024, are influencing premium structures while boosting market revenue .
Digital transformation: Insurers are leveraging AI and telematics to optimize underwriting, with usage-based insurance (UBI) models gaining traction across markets like South Korea and Singapore .
EVs Reshaping Underwriting and Demand
The shift toward electric and hybrid vehicles is transforming the industry. In China, NEVs already constitute one-third of vehicle sales, prompting insurers to develop tailored products addressing risks like battery damage and charging infrastructure liabilities . Taiwan, Singapore, and China have introduced EV-specific regulations to standardize coverage, while Chinese automaker BYD’s entry into the insurance sector via a 2024 acquisition exemplifies the trend of OEMs integrating insurance services. BYD’s in-house motor liability policies aim to capitalize on its EV market leadership, with its newly acquired subsidiary generating $2.6 million in net income during the first half of 2024 .
Innovation in Pricing Models and Regulatory Reforms
To meet evolving consumer needs, insurers are rolling out pay-as-you-drive (PAYD) and mileage-based plans. South Korea’s Carrot General Insurance, for instance, offers a pay-per-mile program with a 91.3% renewal rate, while Singapore’s Income Insurance partners with telematics providers to offer real-time premium calculations for EVs . These models appeal to cost-conscious drivers and help insurers manage rising claims costs amid inflationary pressures.
Regulatory changes are also accelerating growth. Indonesia’s planned 2025 mandate for motor third-party liability insurance—a move aligned with ASEAN standards—will expand coverage to millions of vehicles, while Malaysia’s push for EV adoption targets a 7.5% CAGR for its motor insurance market through 2028 .
Profitability Amid Challenges
Despite pricing constraints and strict premium regulations in markets like China, GlobalData analyst Swarup Kumar Sahoo highlights that profitability will be sustained through moderate rate increases, disciplined underwriting, and strategic partnerships. For example, insurers are collaborating with EV charging networks and telematics firms to enhance risk assessment and customer engagement. However, balancing premium affordability with rising repair costs—exacerbated by supply chain disruptions and inflation—remains a critical challenge .
As the region navigates these dynamics, the motor insurance sector’s growth trajectory underscores its resilience and adaptability, positioning Asia-Pacific as a global leader in innovation-driven insurance solutions.
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