Market Trends of India Car Insurance Industry
Rise in Car Sales
Post-COVID-19, as the economy is recovering with an increase in the level of employment and household income, the sales volume of car in the country are observing an increase, as well as the number of car insurance policies purchased with third-party motor insurance existing as a compulsory policy in the country. SUVs and small cars cover a share of more than 50%in the overall passenger car unit sales in India, leading to car insurance providers focusing on these segments while launching their products. Increases in car insurance premium rates in the country are leading to a rise in gross premiums written in the car insurance market, with an increasing number of players entering the market to reap the market and minimize the car insurance policy cost. With the current car ownership rate in the Indian market, it exists with a large scope to rise over the coming period leading to the expansion of the car insurance industry.
Rising Digital Innovations in Car Insurance
Almost one-fourth of the car insurance in India is bought through online channels; with rising digital and product innovations, an increasing number of private players are entering the market with their online car insurance products. India exists among the leading countries globally, with the largest number of digital banking users at more than 200 million in number, creating a positive externality for the sales of online car insurance and investment by global car insurance players. Increasing adoption of insurtech by the insurance businesses is an additional catalyst boosting the expansion of the car insurance business in India. The launch of mobile telematics-based car insurance in the country is leading the insurance business in a new direction, with insurers charging premium rates based on users' driving scores generated based on different driving parameters. Over the period, HDFC, Bajaj Allianz, Reliance General, and Tata AIG have emerged as leading private car insurance companies in India.
