Page 16 - The Insurance Times January 2022

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Motor insurance in Asia- goals. For instance, Singapore aims to Japan, South Korea, Australia, and In-
phase out diesel-powered vehicles by dia are among the region’s top five
Pacific to reach $294.2bn
2025, as a result, EV sales rose by over markets, with a collective share of
in 2025 80% during January–September 2021. 39.9% in 2020. Motor insurance pre-

The motor insurance industry in Asia- Insurers are also focusing on product miums in these markets are expected
Pacific (APAC) is projected to grow from innovation to drive sales. Pay-as-you-go to grow by 2.5%, 3.7%, 13.8%, and
$226.0bn in 2020 to $294.2bn in 2025, and short-term car insurance are ex- 3.2%, respectively, in 2021.
in terms of written premiums, accord- amples of products that gained trac- Naimisha concludes: “APAC motor in-
ing to GlobalData, a leading data, and tion during the lockdown as demand for surance industry is expected to main-
analytics company. customized motor insurance surged tain its growth trend over the next five

GlobalData’s insight report, ‘2021 Glo- particularly from ride-share services years. However, the industry is ex-
bal Motor Insurance Market’, reveals providers such as Uber, Tada (South posed to the resurgence of COVID-19
that the motor insurance industry in Korea), and Ola (India). pandemic and the ongoing supply chain
Asia-Pacific will grow at a compound China is the largest motor insurance disruption, which can impact the pre-
annual growth rate (CAGR) of 5.4% market in the region with a 52.9% mium growth.”
over 2020–2025, supported by the re- share of premiums in 2020. The
covery in new vehicle sales and prod- country’s growing middle-income popu- Rising road accidents to
uct innovation in motor insurance. lation and rising disposable income are dent profitability of
Kotu Keerthi Naimisha, Insurance Ana- the key drivers of motor insurance Singapore motor insurers
lyst at GlobalData, comments: “After growth. The motor insurance premium
registering 0.4% growth in 2020, APAC in China is expected to grow by 5.7% in 2021
region’s motor insurance industry is in 2021. After registering underwriting profits of
expected to report strong recovery China’s motor insurance industry will S$104.5m in 2020, the profitability of
with 5.1% growth in 2021. Recovery in also be supported by the undergoing Singapore motor insurers is expected
vehicle sales, new product develop- reforms through which the regulator to decline in 2021 due to a rise in
ment coupled with the easing of aims to control premium prices and claims, driven by an increase in road
lockdown restrictions will support de- develop commercial motor insurance. accidents and insurance frauds, says
mand for motor insurance.” The penetration of commercial motor GlobalData, a leading data, and

Recovery in vehicle sales in 2021 is insurance is very low in the country due analytics company.
mainly driven by growing sales of elec- to a lack of insurance availability and Swarup Kumar Sahoo, Senior Insurance
tric vehicles (EV) as many economies high premiums. With this reform, mo- Analyst at GlobalData, comments: “In
aim to phase out internal combustion tor liability premium prices were low- Singapore, the number of accident-re-
engine vehicles as part of their climate ered by up to 50%. lated fatalities has increased by 11%,

16 The Insurance Times, January 2022