Singapore Motor Insurance Market By Insurance Type (Third Party Liability, Comprehensive), By Distribution Channel (Agents/Brokers, Bank, Online, Others), By Region, Competition, Forecast & Opportunities, 2020-2030F

Market Overview

The Singapore Motor Insurance market was valued at USD 6.12 Billion in 2024 and is expected to grow to USD 8.22 billion by 2030 with a CAGR of 2.26% during the forecast period. The Singapore Motor Insurance market is driven by several factors, including the increasing vehicle ownership due to urbanization and a growing population. As a part of this, according to a recent study, the population of Singapore in 2024 was 6,052,709, up 0.63% from 2023. Regulatory changes, such as mandatory third-party liability coverage, have also shaped market dynamics. Rising awareness of road safety and the importance of comprehensive coverage further boosts demand for motor insurance. Technological advancements, including the integration of telematics and data analytics, enable insurers to offer personalized policies, attracting more customers. Also, the growing adoption of electric vehicles (EVs) presents new opportunities and challenges, with insurers developing specialized policies to accommodate this emerging market segment.

Key Market Drivers

Rising Car Ownership Across the Region

Rising car ownership across Singapore is a significant driver of the country’s motor insurance market. As a part of this, according to a recent study, as of April 2023, there was an unprecedented increase in the number of privately owned cars registered. The number of private passenger cars increased by 2.4%, reaching 532,204 in 2021 from 519,132 the previous year. As the population grows and the economy strengthens, more individuals and families are purchasing vehicles, leading to a greater need for motor insurance. This trend is further fueled by increased urbanization, with more people opting for personal cars to navigate the city’s transportation challenges, despite the efficient public transport system. As a result, the demand for motor insurance, particularly for third-party liability, comprehensive coverage, and add-ons like theft protection and accidental damage, continues to rise. Insurers are tailoring their offerings to meet the diverse needs of vehicle owners, from young drivers to high-net-worth individuals. Also, rising car ownership has led to more competition in the market, driving innovation in pricing models, digital services, and customer engagement. This ensures that the Singapore motor insurance market remains dynamic and increasingly competitive.

Growing Innovation by Key Players

Innovation by key players is a major driver of the Singapore motor insurance market, fostering competition and transforming the landscape. As a part of this, as of September 2024, Income Insurance, one of Singapore's leading motor insurers, launched eDrivo Car Insurance (eDrivo), which provides complete electric vehicle (EV) coverage in Singapore. More specifically, eDrivo offers two industry-first features: 24-hour emergency mobile rescue and an optional battery replacement excess, in addition to a comprehensive suite of auto insurance coverage. The distinct benefits are intended to address EV owners' primary concerns about 'Range anxiety', which is the fear that their EV may run out of power before finishing its journey, as well as the exorbitant expense of battery replacement if it is damaged in an accident. Insurers are increasingly leveraging technology to create more personalized and efficient insurance products, responding to changing consumer expectations and preferences. One prominent trend is the adoption of telematics, which allows insurers to track driving behaviour, offering usage-based insurance (UBI) policies. These policies reward safe drivers with lower premiums, attracting a tech-savvy and price-conscious customer base.

Key players are also exploring the integration of artificial intelligence (AI) and machine learning for better risk assessment, claims automation, and fraud detection. AI-driven tools help insurers more accurately predict risks and set competitive pricing models. Also, insurers are adapting to the growing popularity of electric vehicles (EVs) by offering specialized insurance products tailored to EV owners’ unique needs. This innovation aligns with the country's push for sustainability, helping insurers tap into the evolving market of environmentally conscious consumers. As innovation continues to drive the sector, competition remains fierce.

Rising Road Accidents Across the Region

Rising road accidents across Singapore and the broader region have become a significant driver of the motor insurance market. As a part of this, according to a recent study, as of 2023, traffic accidents with injuries climbed slightly from 6,779 in 2022 to 6,944 in 2023 but remained lower than the pre-COVID high of 7,705 in 2019. As traffic volumes increase due to higher vehicle ownership, the frequency of accidents, including minor collisions and major accidents, also rises. This, in turn, fuels demand for motor insurance products that provide adequate coverage for vehicle repairs, medical expenses, and third-party liabilities.

The government has implemented various road safety initiatives, such as stricter regulations and enhanced road infrastructure, to mitigate accidents. However, the growing number of vehicles on the road, coupled with human factors like distracted driving, speeding, and fatigue, continues to contribute to accidents. Also, insurers are leveraging advanced technologies like telematics and AI to monitor driving behavior, offering discounts for safe driving practices and promoting accident prevention. With road safety increasingly prioritized by consumers and regulators, the rising incidence of accidents pushes motor insurance providers to innovate and expand their offerings, ensuring more comprehensive and customer-centric solutions.

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Key Market Challenges

 Rising Premium Rates

Rising premium rates pose a significant challenge to the Singapore motor insurance market, impacting both consumers and insurers. As accident rates increase and repair costs escalate due to higher vehicle complexity and the rising cost of spare parts, insurers are forced to adjust premiums to maintain profitability. Also, the growing frequency and severity of claims, including natural disaster-related damages, further drive-up premiums.

For consumers, rising premiums result in higher costs of ownership, leading some to reconsider their insurance choices or opt for lower coverage, which could leave them financially vulnerable in the event of an accident. This can create a market segment of underinsured drivers, potentially increasing risk exposure for insurers. On the insurer side, maintaining competitive pricing while covering rising costs is a delicate balancing act. Insurers must innovate by offering personalized policies, leveraging data analytics, and embracing telematics to adjust premiums based on driving behaviour. However, rising costs may still limit the ability to attract price-sensitive customers, especially in a highly competitive market. This challenge requires insurers to continuously adapt their pricing strategies and offer value-added services to retain customers while managing increasing operational costs.

Intense Competition Among Key Players

Intense competition among key players presents a significant challenge in Singapore's motor insurance market, particularly when it comes to pricing strategies. With numerous insurers vying for market share, there is constant pressure to offer competitive rates to attract customers. This often leads to price wars, where insurers lower premiums to remain appealing, which can undermine profitability and strain financial sustainability.

However, offering lower rates can come at the expense of comprehensive coverage or customer service, which may negatively impact brand reputation and customer loyalty in the long term. Also, while competitive pricing helps insurers attract price-sensitive customers, it can also create a market of underinsured drivers, increasing risk exposure for insurers and raising claims costs. To stay ahead in this competitive landscape, insurers are increasingly focusing on differentiation through value-added services, such as personalized policies, digital platforms, and fast claims processing. Despite these efforts, the pressure to offer attractive rates while maintaining profitability remains a key challenge. Balancing competitive pricing with adequate coverage and long-term financial sustainability requires insurers to innovate continuously and employ data-driven strategies, including the use of telematics and AI, to optimize pricing models without compromising on service quality.

Key Market Trends

Growing Adoption of Electric Vehicle

The growing adoption of electric vehicles (EVs) is a key trend shaping the Singapore motor insurance market. As Singapore moves toward a more sustainable future, the government is actively encouraging the adoption of EVs through incentives and infrastructure development, such as expanding charging stations. As a result, more consumers are choosing EVs over traditional combustion engine vehicles, driving a shift in the motor insurance landscape.

This shift is prompting insurers to tailor their policies to meet the unique needs of EV owners. For example, EVs often have higher initial costs due to advanced technology and specialized components, which affects coverage options and premiums. Insurers are increasingly offering policies that include specific coverage for EV-related risks, such as battery damage, charging infrastructure, and roadside assistance for EVs. Also, insurers are using telematics and data analytics to offer more personalized insurance policies based on driving behaviour, which aligns with the needs of environmentally conscious consumers. The rise of EVs is also pushing insurers to innovate with new risk models and pricing strategies, ensuring they are equipped to handle the growing demand for electric vehicle insurance. This trend is expected to continue as more drivers make the transition to cleaner, greener vehicles.

Growing Demand for Bundled Policies

The growing demand for bundled policies is a notable trend in Singapore's motor insurance market, as consumers increasingly seek convenience, cost savings, and comprehensive coverage. Many drivers now prefer bundling their motor insurance with other types of coverage, such as home, travel, or life insurance, to simplify their insurance needs and reduce premiums. Insurers are responding by offering multi-policy discounts, which encourage customers to consolidate their insurance products under one provider.

Bundled policies also allow insurers to enhance customer loyalty by offering a range of services tailored to various needs. For example, a bundled package could include home insurance with car insurance, giving customers a one-stop solution for managing risks across multiple aspects of their lives. This convenience appeals particularly to younger, tech-savvy customers who prefer digital platforms to manage their policies. Also, bundled policies provide insurers with an opportunity to cross-sell products and expand their customer base. This trend is also driven by a greater awareness of the value of comprehensive coverage, where customers seek holistic protection for their assets, rather than individual policies. As competition intensifies, bundling offers a strategic advantage, helping insurers to differentiate themselves while addressing evolving customer preferences.

Growing Trend for Customized Policies

The growing trend for customized policies is reshaping Singapore motor insurance market as consumers increasingly demand tailored coverage that suits their specific needs. Instead of opting for standard policies, many drivers now seek flexibility in their insurance plans, wanting to adjust coverage limits, add optional features, and only pay for the coverage they truly need.This shift is driven by consumers’ desire for more personalized services, as well as advancements in technology, such as telematics and data analytics, which allow insurers to offer usage-based insurance (UBI). Through telematics, insurers can track a driver’s habits, such as speed, mileage, and braking patterns, providing more accurate risk assessments and enabling discounts for safe driving. This approach allows customers to pay premiums based on their driving behavior rather than a one-size-fits-all pricing model. as more consumers drive electric vehicles (EVs) or high-performance cars, insurers are tailoring policies to address the specific risks associated with these vehicles, such as higher repair costs or specialized components. The trend toward customized policies is also fostering greater customer satisfaction and loyalty, as drivers appreciate the ability to select coverage that aligns with their lifestyle, enhancing the overall insurance experience.

Segmental Insights

Distribution Channel Insights

Agents/Brokers dominated the Singapore Motor Insurance market, acting as intermediaries between consumers and insurers. They play a crucial role in guiding customers through policy selection, offering personalized advice, and helping them navigate complex coverage options. With their local expertise and established relationships with multiple insurers, agents and brokers ensure that consumers find the most suitable policies at competitive prices. Despite the rise of digital platforms and direct-to-consumer sales, agents and brokers continue to retain a significant market share due to their ability to provide tailored recommendations, after-sales support, and claims assistance.

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Regional Insights

North-East dominated the Singapore Motor Insurance market, driven by factors such as rapid urbanization, a growing population, and increasing vehicle ownership. Areas like Sengkang and Punggol have seen significant residential development, contributing to higher demand for motor insurance. The region’s extensive road infrastructure and proximity to key commercial areas also make it a hub for car ownership. As more residents in the North-East region purchase vehicles, the demand for motor insurance grows, prompting insurers to cater to this expanding market with competitive products and services tailored to local needs.

Recent Developments

• In October 2024, MoneyHero has partnered with bolttech to offer a new car insurance platform that will better the user experience by leveraging its insurance exchange technology. This enhanced platform, which is now available in Hong Kong, provides a smoother experience for vehicle insurance buyers, including comprehensive comparison tools and accurate pricing. MoneyHero wants to launch the platform in Singapore by the end of 2024 and in the Philippines in early 2025.
• In July 2024, FWD Singapore and Income Insurance partnered to provide vehicle insurance coverage for both automobile and motorcycle drivers’ Singapore will distribute insurance underwritten by Income Insurance, expanding its online insurance services and providing customers with comprehensive coverage. Singapore plans to continue offering competitive premium prices by leveraging Income Insurance's auto insurance experience.
• In July 2023, Carousell, the multi-category classifieds and recommerce marketplace, partnered with Carzuno, a car-as-a-subscription firm, to launch the Carousell Car Subscription in Singapore, giving customers with even more convenience. Since then, consumers can experience entirely digital end-to-end service, from selecting their favourite car to returning it without leaving their home.
• In July 2023, Surer, a local insurtech company, announced a cooperation with Direct Asia Insurance (Singapore) ("DirectAsia"). The cooperation will see both companies integrate their capabilities to enable insurance intermediaries to digitally work on highly customizable vehicle insurance policies, allowing them to provide their customers, the end policyholders, with greater flexibility. The collaboration also allows several of Surer's fundamental capabilities and features to be applied to the DirectAsia Car Insurance offering.

Key Market Players

• Singapore Life Ltd
• FWD Singapore Pte. Ltd
• India International Insurance
• AIG Asia Pacific Insurance Pte. Ltd
• Allianz Insurance Singapore Pte. Ltd
• Etiqa Insurance Pte. Ltd
• Auto & General Insurance (Singapore) Pte. Limited’
• Income Insurance Limited
• Assure (Singapore) Pte. Ltd.
• The Great Eastern Life Assurance Co. Ltd

Report Scope:

In this report, the Singapore Motor Insurance Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

•   Singapore Motor Insurance Market, By Insurance Type:

o   Third Party Liability

o   Comprehensive

• Singapore Motor Insurance Market, By Distribution Channel:

o   Agents/Brokers

o   Bank

o   Online

o   Others

• Singapore Motor Insurance Market, By Region:

o   North-East

o   Central

o   West

o   East

o   North

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Singapore Motor Insurance Market.

Available Customizations:

Singapore Motor Insurance Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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