Australia Motor Insurance Market Size, Share Analysis and Forecast Report (2024-2032)

Australia Motor Insurance Market Trends

The most visible trend in the market is usage-based insurance (UBI). Insurers are adopting telematics technology to track driving behaviour so that they can offer premium personalised by actual usage. This appeals to consumers looking for more affordable and customised insurance options, thus creating new trends in the Australia motor insurance market. More than this, the emphasis on sustainability is compelling insurers to create green policies that will promote risk-free driving and coverage of electric vehicles. The trends are thus shaping the future landscape of motor insurance as consumer preferences change.

Australia Motor Insurance Market Growth

The deployment of technology and digital solutions remains a key influencer of the Australian motor insurance market. Consumers are now digitally empowered, and they will seek online convenience when they go to purchase and subsequently administer their insurance policies. Insurers have been responding to this pressure by upgrading apps and websites to create convenient means of policy comparisons, claims, and contact services. Telematics offers the opportunity for customised insurance products and pushes usage-based pricing models that are correlated with individual driving behaviours. Usage-based pricing models will continually boost customer engagement and power the market as a whole for growth.

Australia Motor Insurance Market Insights

• According to the Australian Bureau of Statistics (ABS), New South Wales and Victoria recorded the highest number of motor vehicles registered, estimated at 6,047,028 and 5,272,958 in 2022, thus boosting the Australia motor insurance market growth.
• The increasing interest in comprehensive motor insurance since it provides broad protection against various financial risks such as accidents, thefts, fire damage and many more to ensure financial protection is boosting its adoption. It also offers competitive premiums, and discounts to attract customers.
• As per the Australian Prudential Regulation Authority (APRA), the gross earned premium for motor vehicles increased to AUD 3,354 million in 2022 from AUD 2,931 million in 2012.

Industry News

November 2021

NRMA Insurance has launched in Western Australia and South Australia, expanding its motor, home, and business insurance offerings. This move complements existing brands SGIO and SGIC. The expansion also creates new roles at the West Perth call center, increasing local employment to 800.

January 2021

Ahm launched car and home insurance with insurtech Open, leveraging their technological capabilities. Open manages the products, while ahm promotes them to existing and new customers, underwritten by Hollard.

Australia Motor Insurance Market Drivers

Technological innovation, including automation and enhanced recovery methods, will drive upstream market growth.

Awareness of road safety and the importance of having comprehensive coverage are among the main factors that are driving growth in the Australian motor insurance market. More consumers seek policies that offer wide protection, such as emergency assistance and rental car coverage, as they become better informed about the risks involved with driving, thus driving the Australia motor insurance market growth. For instance, the higher deployment of ADAS in new cars provides an opportunity for highly customised insurance products. Demand will increase further as greater safety and security become even more critical going forward.

Opportunities in the Australia Motor Insurance Market

Coverage for autonomous vehicles offers a niche opportunity in the evolving insurance market.

The development of coverage specifically for autonomous and semi-autonomous vehicles will present a niche opportunity. As these technologies become popular, insurers can develop a customised policy to address some of the distinct risks connected with autonomous driving, such as data privacy, software malfunction, and liability issues. This specialisation will enable insurers to cater to tech-savvy consumers and early adopters, which will also enhance customer trust and engagement. Taking the lead in this new sector would mean insurers would be capturing the demand for the emerging market in innovative coverage solutions and triggering growth in that emerging sector.

Market Dynamics

Telematics is a new technology in which devices or mobile applications monitor driving behaviours, is rapidly changing the Australia motor insurance market dynamics and trends. It would enable insurers to offer usage-based insurance, in which premiums are calculated based on actual driving patterns rather than traditional risk factors. For example, AAMI recently introduced telematics programs, which offer lower premiums as a reward for good safe driving. This not only encourages the right driving but also fosters higher engagement and satisfaction among customers in line with the ever-increasing need for individualised insurance products.

Market Restraints

One significant constraint in the Australian motor insurance market is the increased occurrences and severity of natural catastrophes, such as floods and bushfires, thus leading to Australia motor insurance market challenges. The subsequent costs of the claims would escalate and therefore can bring a tremendous loss to the insurance companies who then tend to hike their premiums. With further regulatory changes being geared toward protecting consumers even better, there might be stiffer norms that further aggravate the problems for the insurers, thereby increasing their cost of operations. Advanced vehicle technology maturity also increases the likelihood of bigger repair costs, putting pressure on insurance price and business sustainability.

Australia Motor Insurance Industry Segmentation

The EMR’s report titled “Australia Motor Insurance Market Report and Forecast 2024-2032” offers a detailed analysis of the market based on the following segments:

Market Breakup by Policy Type

• Third-Party Motor Insurance
• Third-party, Fire and Theft Motor Insurance
• Comprehensive Motor Insurance

Market Breakup by Vehicle Type

• Old Vehicles
• New Vehicles

Market Breakup by User

• Personal Vehicle
• Commercial Vehicle

Market Breakup by Distribution Channel

• Direct Response
• Insurance Agents/Brokers
• Banks
• Others

Market Breakup by Region

• New South Wales
• Victoria
• Queensland
• Australian Capital Territory
• Western Australia
• Others

Australia Motor Insurance Market Share

By Policy Type

Policy types like third-party, fire and theft, and comprehensive insurance drive market growth.

Each policy type in the Australian motor insurance market plays a distinct role in propelling growth. Third-party motor insurance remains popular due to its affordability, meeting the legal requirements for vehicle owners while attracting budget-conscious consumers. As per Australia motor insurance market analysis, third-party, fire, and theft motor insurance offers enhanced protection, appealing to those seeking additional coverage without the cost of comprehensive policies. Comprehensive motor insurance is gaining traction as consumers increasingly value full coverage for their vehicles, especially with rising repair costs and advanced vehicle technologies. Together, these policy types cater to diverse consumer needs, driving overall market expansion.

Market Analysis by Vehicle Type

Insurance for old vehicles focuses on affordability, while new vehicles receive comprehensive coverage options.

Insurance for old and new vehicles is tailored to meet the distinct needs of each category. For old vehicles, insurers often provide specialised policies that account for the vehicle's depreciated value, offering coverage options like classic car insurance. As per Australia motor insurance industry analysis, these policies typically focus on protecting against damage and theft while keeping premiums affordable. In contrast, new vehicles usually come with comprehensive insurance options, covering a wider range of risks, including collision, theft, and damage from natural disasters. Insurers also offer features like roadside assistance and rental car coverage, appealing to owners seeking peace of mind.

User Analysis

Personal and commercial vehicle users drive demand through diverse insurance needs and customization.

The demand in the market is essentially pushed by personal and commercial vehicle users. Personal vehicle owners have always been interested in comprehensive cover to be assured of total protection, especially with growing repair costs and advanced technologies in vehicles. This kind of customer usually demands extra features and customization, thus bolstering the Australia motor insurance demand. The commercial vehicle user, however, needs specialised policies in covering different risks that will occur during business operations such as liability and cargo protection. Demand in Australia is further coming from the rapidly increasing small businesses and fleet operators, who are compelled to look for good insurance solutions to cover their assets.

Distribution Channel Insights

Demand is augmented through direct response, agents, banks, and comparison websites facilitating choices.

Demand in the motor insurance market in Australia is bolstered through various distribution channels. Direct response channels offer consumers convenience and competitive pricing, appealing to those who prefer online transactions. Insurance agents and brokers provide personalised service and expert advice, helping clients find suitable policies tailored to their needs. Banks also play a significant role by bundling insurance products with financing options, enhancing customer loyalty. Additionally, other channels, such as comparison websites, facilitate easy policy comparisons, driving demand by empowering consumers to make informed choices.

Australia Motor Insurance Market Regional Insights

New South Wales Motor Insurance Market Regional Insights

The New South Wales motor insurance market is robust, driven by a high vehicle ownership rate, which reached approximately 4.2 million registered vehicles in 2023. The state accounts for nearly 33% of Australia’s total motor insurance premiums, reflecting its significant market share. Rising repair costs, influenced by advanced vehicle technology, are prompting insurers to adapt their offerings. Additionally, regulatory changes and a growing demand for comprehensive coverage are shaping the competitive landscape, encouraging companies to innovate and enhance customer service in this dynamic market.

Victoria Motor Insurance Market Analysis

Victoria motor insurance market is characterised by a competitive landscape and a high penetration rate, driven by approximately 3.6 million registered vehicles in 2023. The state has seen increased demand for comprehensive insurance policies due to rising vehicle repair costs and regulatory changes. Companies like RACV are prominent players, offering a range of motor insurance products tailored to meet diverse consumer needs. With a focus on customer service and technology integration, the market is evolving to provide more personalised and efficient insurance solutions.

Queensland Motor Insurance Market Trends

The Queensland motor insurance market is experiencing notable trends, driven by an increasing emphasis on personalised insurance solutions and digital transformation. In 2023, registered vehicles in Queensland reached around 3.1 million, leading to heightened competition among insurers. Usage-based insurance is gaining traction, allowing customers to pay premiums based on driving behaviour. Additionally, the demand for comprehensive coverage is rising due to escalating repair costs and a growing awareness of insurance products. Insurers are leveraging technology to enhance customer experiences and streamline claims processes.

Australian Capital Territory Motor Insurance Market Drivers

The Australian Capital Territory motor insurance market is driven by a growing emphasis on sustainability and eco-friendly vehicles. With approximately 470,000 registered vehicles in 2023, there is increasing demand for insurance tailored to electric and hybrid models. Regulatory changes are also enhancing consumer protection and promoting transparent practices. Insurers are responding by offering innovative coverage options that include benefits for low-emission vehicles. Additionally, digital platforms are improving customer accessibility, enabling easier comparison and purchase of insurance products that align with environmental values.

Western Australia Motor Insurance Market Dynamics

Western Australia motor insurance market is shaped by several key dynamics. As of 2023, the state recorded about 2.9 million registered vehicles, contributing to a competitive landscape. The rise in vehicle technology has led to increased repair costs, prompting a shift towards comprehensive insurance options. Additionally, the state’s regulatory framework promotes consumer rights and transparency in the insurance process. Insurers are utilising digital solutions to enhance customer service and streamline claims, adapting to the evolving preferences of consumers and improving overall market efficiency.

Competitive Landscape

Australia oil and gas upstream market players are aimed at achieving improvement in efficiency during exploration and production prioritising sustainability and environmental responsibility. The main thrust would be towards seeking development in technology for maximisation of resources in extraction along with saving on the operation itself. In addition, most of the oil companies are making investments in projects related to natural gas so that this alternative can be identified and applied for the sources to provide cleaner energy. Australia oil and gas upstream companies seek to meet the demands of domestic as well as international energy, meeting it in innovative solutions and improved operational practices that are within Australia's wide approach to long-term goals and climate commitments.

Key Industry Players

Auto & General Services Pty Ltd.

Auto & General Services was founded in 1988 and operates from Brisbane. It focuses on the offering of motor insurance products with comprehensive products. Its service includes car insurance under the policy, roadside assist, and flexible cover. All this goes to create solutions for various motorists in Australia to serve them better, build their customer experience and satisfaction.

Youi Pty Ltd.

Founded in 2007 and headquartered in Queensland, Youi Pty Ltd. focuses on personalised motor insurance offerings. The company provides customizable car insurance policies that allow customers to select coverage based on individual requirements, promoting flexibility and competitive pricing, while also emphasising exceptional customer service and support.

BJS Insurance Brokers Pty Ltd.

BJS Insurance Brokers was established in 2004 and is located in Melbourne. This company offers specialist motor insurance packages for personal and commercial vehicles. The company provides comprehensive policies, risk assessments, and customised advice to ensure that its clients receive the most appropriate coverage to meet the specific requirements they have within the Australian market.

Allianz Australia Insurance Limited

Allianz Australia was established in 1900 and is located in Sydney. It is a known motor insurance company that provides different types of comprehensive car insurance for new vehicles, full comprehensive, third-party liability, and value-added services such as 24/7 claims support and roadside assistance.

Other Australia motor insurance market key players are Insurance Australia Limited, among others.

Recent Developments

July 2024

HCF has recently collaborated with Allianz and launched new home and motor products. These include various home and car insurance options that look to provide total coverage with vast flexibility.

February 2024

KOBA Insurance launched electric vehicle insurance in March 2024, targeting the rapidly growing demand for electric vehicles in Australia. The product will be tailored to the needs of electric vehicle drivers by including features such as a choice of repairer, EV car hire, charging equipment cover, and battery health checks.