Multi-billion dollar car insurance market set to grow worldwide

100-Dollar-CarThere’s no doubting car insurance is a multi-billion dollar industry which is forecast to grow in line with the expected large increase in vehicle numbers on roads worldwide. Indeed, industry watchers expect the vehicle insurance market to increase in value from about $560 billion in 2011 to around $650 billion by 2017.

Although North America dominates the industry, its position is likely to be challenged by new and emerging markets like China, where disposable income has increased greatly over recent years and car ownership has risen dramatically as a consequence.

The Middle East is another region of the world where the car insurance market is changing. In the United Arab Emirates (UAE), for example, the introduction of a database now means insurance companies can share information for the first time. The new system, developed by Dubai-based eData Management Solution, has been warmly welcomed and should see good drivers rewarded with reduced premiums.

Car ownership in China

A recent report by EY suggests the number of privately owned cars in China, which exploded from virtually nil in 1985 to an estimated 120 million cars today, is expected to grow to 200 million vehicles by 2020.

The report, 2014 Global Insurance Outlook, adds, “At present, motor insurance is the largest non-life insurance line in the country. Compulsory third-party liability alone accounted for 72% ($65 billion) of China’s aggregate non-life premium in 2012. Seven non-Chinese insurers have entered the third-party liability automobile insurance market since it was opened to foreign competition in 2012.”

Joint venture

Underlining the tremendous opportunity which China represents, LexisNexis Risk Solutions, a division of Reed Elsevier, has announced its intention to create a joint venture with Jing You, a leading private supplier of data, software and services to the insurance industry in the country. The joint venture will supply data to insurance companies in China and be based in Beijing.

The partnership is part of LexisNexis Risk Solutions’ strategy of internationalizing its business in fast-growing markets. The company already provides extensive services to US auto insurance carriers and is increasing its product offering to UK motor insurers.

Unique opportunity

Bill Madison, chief executive, Insurance, LexisNexis Risk Solutions, said, “The auto insurance market in China is growing rapidly, and the combination of our expertise and technology with Jing You’s data and deep understanding of the local market provides us both with a unique opportunity. This marks another important step in the international growth of our company through partnerships with organisations in markets that are already viable and productive.”

Jing You founder and CEO Feng Yancheng said, “Following the upcoming reform of Chinese non-compulsory auto insurance products, insurers will increasingly focus on improving management and performance through data products and services. The joint venture between Jing You and LexisNexis will leverage the resources of both parties, and offer even better outcomes to our customers.”

Largest provider

Jing You is the largest provider of data to the insurance industry in China. For more than 10 years, Jing You’s products and services have been helping insurers achieve improved standardization of business management and greater risk control. As the leading provider to the market, Jing You pays close attention to the reliability, security, and performance of data products, and enjoys a very good reputation in the Chinese insurance industry.

Combining cutting-edge technology, unique data and advanced analytics, LexisNexis Risk Solutions is a leader in providing essential information that helps customers across industries and government predict, assess and manage risk. Find out more here.

Comments are closed.