Mobility insurance market to double to $1.38 trillion by 2030: Capgemini

The report states, “…the mobility insurance market is expected to grow from the current $0.65 trillion to $1.38 trillion by 2030.”

According to Capgemini, the world’s automotive industry is on the cusp of “profound change”.

“Revenue (of the automotive industry) is on track to reach $3.8 trillion by 2030, up 35% from 2020. By the end of the same period, autonomous, connected and electric vehicles (EVs) will comprise nearly 40% of the market , above 10% in 2020,” the report said.

However, according to Capgemini, behind the projected rapid growth lies a two-speed journey.

On the one hand, the traditional auto insurance market will continue to grow, adjusting pricing according to factors such as age, postal code, driving experience and insurance history.

And on the other hand, autonomous, connected, electric and shared (ACES) nominal premium is set to witness an eight-fold increase, crossing $0.5 trillion by 2030, according to research reports.

“Future-focused mobility solutions are disrupting traditional coverage as policyholders demand embedded protection for their travel,” said Laurent Flocket, CEO, Mobility & Assistance, Member of the Board of Management of Allianz Partners.

The report states that as the mobility market evolves, carriers will move from insuring assets to protecting mobility trips by launching new business models focused on personalization.

In fact, 42% of policyholders want a policy that covers them irrespective of their mode of transport, Capgemini said.

According to a Capgemini Research Institute report, the global automotive industry is striving to achieve a triple-zero future, which includes zero congestion, zero emissions and zero crashes.

“According to estimates, autonomous, connected and electric (ACE) vehicles will account for 40.1% of the auto market by 2030. This will result in a doubling of the mobility insurance market, with premiums for ACEs expected to increase by $70 billion. 570 from 2021 to 2030 billion dollars. This growth is supported by the adoption of innovative technologies such as 5G, AI and telematics in the automotive sector, as well as declining EV battery prices and government incentives,” the report said.

In 2020, according to the report, conventional vehicles dominated 90.1% of the auto market, while the remaining 9.9% was occupied by ACE vehicles.

However, this is set to change as according to Capgemini, India is showing more interest in adopting innovative mobility options than its global peers.

“86% of Indian respondents showed interest in connected and alternative energy vehicles, while 73% showed interest in autonomous vehicles. Globally, 66% of respondents showed interest in connected and alternative energy vehicles, while 49% showed interest in autonomous vehicles visible,” said the Capgemini report.

According to Capgemini, insurers in India see technology capabilities and competition as key challenges in their journey towards the future of mobility.

In addition, insurers will need to address customer demands for innovative mobility coverage options, with 40% of Indian respondents expressing a desire for a single coverage plan that would cover all mobility-related risks, according to the report.

“Talent and product development are critical for insurers when evaluating their preparedness for the future of mobility, and Indian insurers appear to be more prepared than their global peers in these areas. However, embedded insurance models do not scale well to ACE mobility. are becoming increasingly popular with insurers, raising concerns for insurers across the value chain. Indian insurers report better technology capabilities than their global peers to navigate the future of mobility, but they need more value to enhance customer engagement. There is a need to strengthen its delivery of enhanced services,” Capgemini said.

According to Capgemini, Indian customers prefer digital delivery over value added services, enhanced claims processes and personalized pricing, which are preferred by customers globally.

“Indian insurers have better underwriting capabilities than their global peers, with 47% of Indian respondents having advanced underwriting capabilities compared to 31% of their global peers. The current preparedness of Indian insurers needs to be improved. Overall, Indian insurers are marginally ahead in terms of value chain maturity, but mobility must continue to adapt to the future evolving landscape,” the report said.