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Motor Vehicle Insurance - Sri Lanka

Sri Lanka

The Motor Vehicle Insurance market market in Sri Lanka is expected to reach a projected market size (gross written premium) of US$0.42bn in 2024.
The average spending per capita in the Motor Vehicle Insurance market market is estimated to be US$19.11 in the same year.
This market segment is predicted to display an annual growth rate (CAGR 2024-2028) of 2.30%, leading to a market volume of US$0.46bn by 2028.
In terms of global comparison, the United States is expected to generate the highest gross written premium of US$1,338.0bn in 2024.
The motor vehicle insurance market in Sri Lanka is experiencing a surge in demand due to the increasing number of vehicles on the road.

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Analyst Opinion

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

Customer preferences: Customers in Sri Lanka are increasingly seeking comprehensive motor vehicle insurance coverage to protect their assets and mitigate financial risks. With a rise in disposable income levels, there is a growing trend towards purchasing higher coverage limits and additional add-on benefits to enhance their insurance policies.

Trends in the market: One notable trend in the Sri Lankan Motor Vehicle Insurance market is the increasing adoption of telematics technology. Insurers are leveraging telematics to offer usage-based insurance policies, providing more personalized pricing based on individual driving behavior. This trend not only benefits customers by potentially lowering premiums but also allows insurers to better assess risks and prevent fraudulent claims.

Local special circumstances: In Sri Lanka, the regulatory environment plays a crucial role in shaping the Motor Vehicle Insurance market. The mandatory requirement for third-party liability insurance for all vehicles on the road ensures a steady demand for insurance products. Moreover, the competitive landscape among insurance providers drives innovation in product offerings and customer service to differentiate themselves in the market.

Underlying macroeconomic factors: The overall economic stability and growth in Sri Lanka contribute to the expansion of the Motor Vehicle Insurance market. As the country's economy continues to develop, more individuals are purchasing vehicles, leading to a larger customer base for insurance companies. Additionally, initiatives to improve road safety and reduce accidents by the government also drive the demand for motor vehicle insurance as individuals seek financial protection in the event of unforeseen circumstances on the road.

Methodology

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.