Motor Vehicle Insurance - Pakistan

The Motor Vehicle Insurance market market in Pakistan is expected to witness significant growth in the coming years.
By 2024, the market size, as measured by the gross written premium, is projected to reach US$2.39bn.
This indicates a positive trend in the demand for Motor Vehicle Insurance market in the country.
Furthermore, the average spending per capita in the Motor Vehicle Insurance market market is estimated to be US$9.75 in 2024.
This suggests that individuals in Pakistan are increasingly recognizing the importance of insuring their vehicles against potential risks.
Looking ahead, the Motor Vehicle Insurance market market is anticipated to exhibit a compound annual growth rate (CAGR 2024-2029) of 0.72%.
This steady growth is expected to result in a market volume of US$2.48bn by 2029.
These numbers highlight the potential for further expansion and development within the Motor Vehicle Insurance market sector in Pakistan.
In comparison to other countries, the United States is expected to generate the highest gross written premium in the Motor Vehicle Insurance market market, amounting to US$341.6bn in 2024.
This signifies the dominant position of the United States in terms of market size and revenue generation within the global Motor Vehicle Insurance market sector.
Despite the growing number of motor vehicles in Pakistan, the lack of awareness and enforcement of insurance policies remains a major challenge in the market.

Definition:

Motor vehicle insurance, often referred to as auto insurance, is a type of coverage that offers financial protection to individuals who own or operate vehicles like cars, motorcycles, or trucks. When you have motor vehicle insurance, you pay regular premiums to an insurance company, and in return, the insurer helps cover the costs associated with accidents, damages, and injuries related to your vehicle. This insurance market is essential for providing security and financial assistance in case of accidents, ensuring that individuals can repair or replace their vehicles.

Additional information:

The market contains the following KPIs: gross written premium aggregated for all countries and regions, gross written premium per capita, and the share of insureds in the total population for over 50 countries.

Insurance of land motor vehicles

Accident insurance
Insurance for aerial vehicles
Insurance for watercraft
insurance for spacecraft
All other insurance types, such as life insurance and health insurance
Reinsurance

The Motor Vehicle Insurance market in Pakistan is experiencing significant growth and development.

Customer preferences: Customers in Pakistan are increasingly valuing comprehensive motor vehicle insurance coverage to protect their vehicles from various risks such as accidents, theft, and natural disasters. They are also showing a preference for insurance policies that offer additional benefits such as roadside assistance and quick claims processing.

Trends in the market: One noticeable trend in the Motor Vehicle Insurance market in Pakistan is the rising demand for usage-based insurance policies, where premiums are based on the actual usage of the vehicle. This trend is driven by the increasing adoption of telematics technology in vehicles, allowing insurance companies to track driving behavior and offer more personalized insurance plans. Additionally, there is a growing trend towards digitalization in the insurance sector, with more customers opting to purchase and manage their insurance policies online.

Local special circumstances: In Pakistan, the Motor Vehicle Insurance market is also influenced by factors such as the regulatory environment, market competition, and the overall economic landscape. The regulatory framework plays a crucial role in shaping the insurance market, ensuring consumer protection and fair business practices. Moreover, the presence of both domestic and international insurance companies in the market has led to increased competition, driving innovation and offering customers a wide range of insurance products to choose from.

Underlying macroeconomic factors: The development of the Motor Vehicle Insurance market in Pakistan is closely tied to the country's overall economic growth and stability. As the economy continues to expand and the middle-class population grows, there is an increasing number of vehicle owners seeking insurance coverage. Additionally, factors such as urbanization, infrastructure development, and changing lifestyles are contributing to the rising demand for motor vehicle insurance in the country.

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on gross written premium, gross written premium per capita, gross claim payments, loss ratio, and distribution channels.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market layer. As a basis for evaluating markets, we use industry associations, national statistic offices, and international organizations, such as OECD. Next we use relevant key market indicators and data from country-specific associations such as insurance consumer spending, gross domestic product, insurance - consumer price index (CPI), population growth. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, exponential trend smoothing and HOLT-linear. The main drivers are insurance consumer spending and insurance - consumer price index (CPI).

Additional Notes:

The market is updated twice per year in case market dynamics change. The impact of the COVID-19 pandemic is considered at a country-specific level.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

As the population of the United States grows, so too does the number of drivers on the road and thus the customer base for motor insurance. In 2022, there were over 280 million registered vehicles on the roads in the United States. Of those millions of registered vehicles, each year there are also millions of vehicle crashes. Road traffic fatalities in the U.S. peaked in 2021. So while many individuals feel secure in their vehicles, the statistics indicate the importance of automobile insurance and in most cases, auto insurance is required by law. Auto insurance is important because it not only covers any physical damage that may occur in an accident, but also any damage or injury that might be caused because of a vehicular accident or which may be done upon oneself or one’s vehicle by another vehicle or accident – a falling tree for example.