Electric and hybrid vehicle insurance market set for robust growth through 2030

Electric and hybrid vehicle insurance market set for robust growth through 2030 | Insurance Business Australia

Motor & Fleet

Electric and hybrid vehicle insurance market set for robust growth through 2030

Report explores surge in demand for specialised insurance

Motor & Fleet

By
Roxanne Libatique

The global market for insurance tailored to electric and hybrid vehicles is expected to experience substantial growth, with a forecasted compound annual growth rate (CAGR) of 16.88% from 2024 to 2030, according to a report by market research company HTF Market Intelligence (HTF).

This anticipated growth stems primarily from increasing adoption rates of electric and hybrid vehicles, driven by escalating environmental concerns and the push for sustainable transport solutions.

The research provided critical insights designed to assist decision-makers in evaluating investment opportunities, pinpointing market gaps, and leveraging potential growth areas. It delved into the evolving market dynamics, identified key trends, and outlined the primary drivers and challenges facing the sector.

Rise in demand for electric and hybrid vehicle insurance

With the rise of electric and hybrid vehicles, there is a growing need for specialised insurance products that address the unique aspects of these technologically advanced vehicles, including specific coverages for battery systems and charging infrastructure.

However, the penetration of such vehicles into the broader auto market remains modest, which poses a challenge for insurers considering substantial investments in this niche area.

Prominent players in the market, such as AIG, Allianz Group, and AXA Gulf, were recognised in the report for their efforts in shaping insurance solutions that cater to the electric and hybrid vehicle segment.

While the electric and hybrid car insurance market is poised for rapid growth due to shifts toward environmentally friendly automotive technologies, the market’s expansion is contingent on broader acceptance and integration of these vehicle types into the global fleet.

RACQ said the latest amendments align with its recommendations, taking into consideration the unique requirements of Queensland’s geography and highlighting the existing gap in fuel-efficient solutions for 4WD and light commercial vehicles.

“A well-designed standard will drive innovation and save motorists money. It will also incentivise manufacturers to send safer cars, utes, and 4WDs to Australia, and ensure they are competitively priced,” the insurer said in a recent statement. “RACQ believes it is very important to secure public confidence in the transition to decarbonised transport. Part of that includes continued government investments in EV charging infrastructure, particularly in regional Australia, purchase incentives and developing a future workforce to fix and service electric vehicles.”