Commercial Auto Insurance Market

Commercial Auto Insurance Market Size (2023 - 2028)

The Global Commercial Auto Insurance Market size was valued at US$ 39.66 billion in 2022 and is anticipated to grow at US$ 61.33 billion by 2028 and increase at a CAGR of 9.90% during 2023 and 2028.

Commercial vehicle insurance is a policy that provides physical damage and liability protection for amounts, situations, and usage that are not covered by a personal auto insurance policy. The expansion of the Global Commercial Auto Insurance Market is primarily due to increased demand and sales of automobiles due to rising per capita income in developing countries. Furthermore, rules and regulations enacted by governments worldwide requiring the purchase of insurance coverage when acquiring a new commercial vehicle have aided the market's growth. New insurance product launches and developments are also projected to contribute to the market's growth.

Market Drivers & Restraints

Drivers

Increased demand among businesses for insurance plans to safeguard them from unforeseen losses. Commercial insurance protects businesses from lawsuits, liability, and workers' compensation claims. The commercial insurance industry is predicted to rise due to increased competition among small and medium-sized companies and the availability of many retail insurance providers. A physical damage policy and liability coverage for quantities, situations, and usage not covered by a personal auto insurance policy is known as commercial vehicle insurance. It provides consumers with final protection against any physical damage caused by commercial vehicle theft or traffic collisions such as accidents, weather, natural disasters, and so on. In addition, the increased use of telematics devices in the retail, construction, and healthcare industries and the adoption of advanced technology in commercial insurance such as artificial intelligence, machine learning, and predictive analysis are expected to create a lucrative commercial insurance market growth opportunity. Furthermore, different add-on coverages and perks given by prominent insurance companies, such as zero depreciation insurance, discounts, and so on, are likely to create profitable chances in this industry. Aside from that, the increase in the number of accidents and damages will propel the market forward.

Restraints

The transition from traditional vehicle insurance to connected vehicle insurance has presented a significant challenge in the digitization of small commercial insurers. In addition, according to S&P Global, car and truck insurers are confronting rising claims costs with road accidents returning to pre-covid levels across the globe. These are some of the factors responsible for hindering the global commercial auto insurance market during the forecast period.

Recent Developments in the Global Commercial Auto Insurance Market

• Safe Fleet, an Oak Hill Capital Partners portfolio company, acquired Durite in March 2021. Durite is the leading brand of electrical, lighting, and vehicle safety products in the United Kingdom. 
• In 2021, the Insurance Regulatory and Development Authority of India (IRDAI) has issued a warning against doing business with a Bangalore-based entity called "Digital National Motor Insurance." According to the IRDAI, the company has not been granted a license or permission to sell insurance. 

COMMERCIAL AUTO INSURANCE MARKET REPORT COVERAGE:

Market Segmentation

Commercial Auto Insurance Market - By Type:

• Liability Insurance 
• Physical Damage Insurance 
• Rental Insurance

The commercial auto insurance market is augmented into liability insurance, physical damage insurance, and rental insurance based on type. Due to the high losses associated with vehicle destruction, the physical damage insurance segment accounted for the most outstanding market share in the upcoming years. 

Commercial Auto Insurance Market - By Application:

• Passenger Car 
• Commercial Vehicle

Based on application, the global commercial auto insurance market is augmented into passenger cars and commercial vehicles. Because of their massive size and high cost, commercial vehicles are expected to have the most significant global commercial auto insurance market share during 2022 - 2027.

Commercial Auto Insurance Market Regional Analysis 

Europe region is estimated to have the highest global commercial auto insurance market share. In 2019, the European motor insurance industry was worth around 146.9 billion euros in gross written premiums. Europe's three largest markets combined accounted for over half of the total.
 

Germany was the largest motor insurance market in Europe in terms of gross premiums written in 2019, with a value of 28.6 billion euros. 

In 2020, the African insurance market was worth $70 billion. In the years ahead, the market is expected to develop at a CAGR of roughly 7% between 2021 and 2026. One of the primary elements propelling the insurance sector in Africa is the presence of various unexplored markets. However, due to well-capitalized domestic firms, a few developed markets, such as South Africa, are very competitive. 

The Asia-Pacific motor insurance industry is expected to expand from US$227.1 billion in 2019 to US$257.8 billion in 2023. During 2019–2023, the automobile insurance market in Asia-Pacific is predicted to rise at a CAGR of 3.2 percent, primarily to an increase in demand for new car sales from the fast-growing middle-class population. 

In 2021, Australia's commercial vehicle insurance market is expected to be worth 2.1 billion USD. On the other hand, the market has grown by 1.3 percent last year and 5.5 percent since 2016. 

In 2017, the Latin American auto insurance industry was projected to be valued at USD 64.20 billion. Moreover, due to the increasing frequency of traffic accidents resulting in car damage and personal injuries, the need for vehicle insurance has increased dramatically. In addition, third-party insurance plans, which are advantageous in cases of bodily injury to a third person caused by motor vehicles, have been mandated by the Colombian government. This scenario has had a significant impact on the demand for vehicle insurance products in Latin America. 

According to the Mexican Association of Insurance Institutions (AMIS), written premiums in Mexico's auto insurance business increased by 7.1 percent in 2018.

According to Policygenius, the US generated $285 billion in revenue in 2019, and the average cost of auto insurance in the US was $1,133.92. Louisiana ($1,443.72) had the highest average spend, followed by Michigan ($1,358.62) and Florida ($1,356.90), according to the National Association of Insurance Commissioners. 

Impact of COVID-19 on Commercial Auto Insurance Market

The commercial insurance business is suffering as a result of the COVID-19 outbreak. Business interruption, digitalized underwriting, claims, and administrative processes, as well as a massive move to remote working across multiple sector verticals, have all become challenging issues for commercial insurers in the market. In addition, because the pandemic has affected all sector verticals, the number of fraudulent claim attempts has increased. The lack of IT infrastructure connecting distribution channels has hampered the expansion of the commercial insurance market. Fortunately, the introduction of telematics solutions has propelled connected auto insurance to revolutionize commercial vehicle insurance. 

Key Market Players

The companies covered in the report include: 

• Progressive
• Old Republic Insurance
• Liberty Mutual
• Nationwide
• Zurich
• Berkshire Hathaway Inc.
• Allstate Corp
• Chubb
• W. R. Berkley Corp
• Others