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Motor industry developments and expectations

Moving on to new challenges and more opportunities in the automotive field
Andrea Keller
Head Automotive & Mobility Solutions at Swiss Re

There are several developments that continue to impact the automotive industry to a significant extent. Among these factors are the push by governments towards vehicles powered by new energies, the COVID-19 pandemic with its subsequent economic fallout – such as chip and raw material shortages – war, socio-demographic changes, and technological advancements.  In turn, insurers are faced with numerous changes to their motor business. Swiss Re’s research indicates that:

  • Global motor premiums are expected to double to almost USD 1.4 trillion by 2040.
  • Even if growing, the motor segment is expected to represent a smaller portion of the total risk pool, shrinking from 42% currently to 32% of global sector premiums by 2040. This development is attributable to two factors: firstly, to the fact that property business is growing fastest, driven by climate risks; and, secondly, to the growth of other P&C lines driven by economic development – cases in point are accidents and specialty lines such as marine, aviation, credit & surety.
  • Emerging markets are expected to become more relevant; the share of motor premiums coming from these areas is expected to rise from 26% in 2020 to 46% in 2040.
  • There is an expectation that there will be a shift from personal to commercial lines. While premium growth in commercial lines is expected to increase from 23% in 2020 to 27% in 2040, growth in personal lines is expected to slow down due to shared economy models as well as lower accident frequency/claims cost per vehicle (as a result of better safety technology).
  • New technologies are likely to make cars more complex. Advanced driver assistance systems (ADAS) features are thought to reduce accidents and claims, and data generated from modern cars will become increasingly important in risk selection and pricing.

This is a moment of truth for insurers to stay relevant in the motor business. So, we intend to support this transition with the skills, expertise and solutions we have developed at a global level over the years. Our Automotive and Mobility Solutions team at Swiss Re and Movingdots comprise experts from around the world. We will continue providing you with a well-informed view of motor risk, in a holistic and comprehensive way, as we focus on what lies ahead in the automotive sector.

Grasp more insights in Swiss Re's publication: The future of motor risk: Driver today, passenger next.


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