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Region’s motor premium tipped to keep growing

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The motor insurance market in the Asia-Pacific is poised to grow to $US257.8 billion ($356 billion) by 2023, up $US30.7 billion ($42 billion) from last year, supported by new vehicle sales to a rapidly growing middle-class population, GlobalData says.

Gross written premiums (GWP) for motor insurance in the region amounted to $US227.1 billion ($314 billion) in 2019.

A compound annual growth rate of 3.2% during 2019–2023 is likely, with several countries showing signs of recovery as economic activity is restored after COVID-19 struck. China, which accounts for half the region’s motor insurance market, registered 16% growth in new vehicle sales in July.

Analyst Deblina Mitra says another key trend is the pace of product innovations. She predicts motor insurance will see major changes over the next few years driven by technological developments, while further advancements in “connected” cars and driver assistance services have “the potential to disrupt the motor insurance industry in the region.”

China-based insurer Ping An provides claims management using image-recognition technology in which loss assessment for repair and other costs is done within a minute from an uploaded photograph.

New insurance products such as short-term car insurance and pay-as-you-go (PAYG) products are also being offered by insurers to support sales at a time when car usage is low due to lockdown restrictions.

In Australia, insurance start-ups such as UbiCar, Real and Kogan are offering pay-as-you-go insurance policies, with the premium based on actual distance travelled, recorded via telematics devices installed in the car.

“It provides greater flexibility as consumers will only pay insurance based on their actual usage, resulting in lower premium,” Ms Mitra said.