On-demand Insurance Market Size, Share & Trends Analysis Report By Coverage (Car, Home Appliances, Entertainment), By End-User (Individuals, Businesses), By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global on-demand insurance market size was valued at USD 955.3 million in 2022 and is expected to expand at a compound annual growth rate (CAGR) of 21.2% from 2023 to 2030. Growing internet penetration and smartphone users have increased access to on-demand insurance products for a large population. Today, insurers can reach potential customers through online channels and mobile apps, making it easier for customers to purchase insurance policies. Additionally, the growth of smartphone users has led to the development of mobile apps that enable customers to purchase on-demand insurance policies on the go. Insurers provide mobile apps allowing customers to browse policies, get quotes, and purchase policies through mobile devices.

Digital transformation is another major factor driving the growth of the on-demand insurance industry. The use of digital technologies has enabled insurers to collect additional data on customer behavior and usage patterns, allowing them to offer more personalized insurance policies. For instance, insurers can use data analytics to offer personalized pricing based on individual risk profiles. Moreover, digital technologies have also made it easier for insurers to interact with customers and offer them a seamless experience. Customers can access insurance products and services through digital channels such as mobile apps and websites, making managing their policies more convenient.

Fintech has positively impacted the on-demand insurance industry by making it easier for on-demand insurance providers to offer their products and for consumers to purchase and manage their policies. Fintech has enabled insurance companies to use data analytics to understand their customers better and offer personalized products. By analyzing data, on-demand insurance providers can gain insights into customer behavior and preferences that can help them to create personalized products that better meet their customers' needs. For instance, they could analyze data on the frequency and severity of customer claims during specific times of the year or in specific geographic locations. This information can help on-demand insurance providers anticipate customer needs and develop products that are tailored to the specific needs of the customers.

Regulatory compliance significantly affects the on-demand insurance industry, as on-demand insurance companies need to comply with various regulations and laws in the countries where they offer their products. Insurance companies offering on-demand insurance products may be required to obtain licenses in the countries where they operate. For instance, in the U.S., insurance companies must obtain licenses from individual states to offer insurance products in those states. Additionally, insurance companies offering on-demand insurance products may collect personal data from their customers. They must comply with data privacy laws, such as the European Union's General Data Protection Regulation (GDPR). According to the GDPR, companies must obtain explicit consent from individuals before collecting and processing their data, as required.

One major restraint of the on-demand insurance industry is the potential fraudulent claims. Fraudulent claims can lead to increased costs for insurers, which may result in higher customer premiums. Insurers would have to allocate more resources to investigate claims and may also need to increase their reserves to cover potential losses. Additionally, fraudulent claims can damage the reputation of insurance providers, leading to a loss of trust and confidence in the market. This can deter potential customers from buying insurance and cause existing customers to switch to other providers.

COVID-19 Impact Analysis

The COVID-19 pandemic has had a significant impact on the on-demand insurance industry. The pandemic has accelerated digital transformation in the market. Insurance companies had to quickly adapt to a remote working environment and find new ways to reach customers. Hence, on-demand insurance products, which can be easily purchased online and managed through mobile apps, became increasingly significant during the pandemic. The COVID-19 pandemic also reduced the demand for other types of insurance schemes, such as auto and home insurance, as people spend more time at home and drive less. This has impacted the on-demand insurance industry, as insurance companies had to adapt their product offerings to meet changing consumer needs.

Coverage Insights

The car insurance segment dominated the market in 2022 and accounted for a revenue share of more than 23.0%. One of the significant factors contributing to the growth of the segment is the ability of customization and flexibility provided by the on-demand car insurance scheme. On-demand car insurance provides flexibility for drivers who may not need traditional car insurance coverage for an entire year. It allows drivers to choose when and how much coverage they need, making it a preferable option for people who only need insurance coverage for a short period. Additionally, on-demand car insurance allows drivers to customize their coverage to their needs. Drivers can choose the coverage they need based on factors such as the type of car they drive, their driving history, and their personal preferences.

The electronic equipment insurance segment is anticipated to register significant growth over the forecast period. The growth is attributable to the rise in the use of electronic devices such as laptops, smartphones, and cameras, among others. As electronic devices become increasingly important in daily life, the demand for insurance coverage for these devices has grown. On-demand insurance provides quick and convenient coverage for electronic devices.

End-user Insights

The business end-user segment dominated the market in 2022 and accounted for a global revenue share of over 71.0%. On-demand insurance providers offer highly customizable insurance policies because they operate in a digital environment, allowing for greater flexibility and speed in developing and underwriting policies. Unlike traditional insurers with standardized policies and rigid underwriting processes, on-demand insurance providers can create policies specifically tailored to individual business needs. Additionally, on-demand insurance companies can offer coverage for equipment used in a particular industry, such as construction or manufacturing. The policy can be designed to cover risks such as theft, damage, or equipment breakdown.

The individual segment is anticipated to register significant growth over the forecast period. On-demand insurance providers offer more transparent policies than traditional insurers, with clear and easy-to-understand terms and conditions. This can help individuals better understand the coverage they are purchasing and ensure they get the protection they need.

Additionally, on-demand insurance is often provided through mobile apps or other digital platforms, making it convenient for individuals to purchase insurance. This can save time and effort for individuals as compared to the process of obtaining traditional insurance, which may require filling out lengthy application forms and undergoing a more involved underwriting process.

Regional Insights

North America dominated the on-demand insurance industry in 2022 and accounted for a revenue share of more than 27.0%. The presence of a large number of leading on-demand insurance providers in the region, such as Slice Insurance Technologies Inc.; SkyWatch Insurance Services, Inc.; Xceedance, Inc, and Thimble has contributed to the regional market's growth. North America's highly competitive insurance market has also contributed to the growth of on-demand insurance providers.

As traditional insurers struggle to keep up with changing consumer preferences and technological advancements, on-demand insurance providers have seized the opportunity to offer innovative products and services that meet customers' evolving needs. Artificial intelligence and machine learning enable on-demand insurance providers in the region to automate underwriting processes and offer more personalized coverage options.

The Asia Pacific regional market is expected to emerge as the fastest-growing market over the forecast period. The Asia Pacific region has seen significant growth in the on-demand insurance industry in recent years, which can be attributed to several factors, including the rapidly growing economies in the region, such as China and India. As these economies continue to grow, there is an increase in the demand for on-demand insurance products. Additionally, the rising demand for on-demand insurance in the Asia Pacific region is driven by changing consumer preferences, technological advances, and government initiatives aimed at promoting financial inclusion.

Key Companies & Market Share Insights

The market is highly fragmented and is characterized by a large number of regional players catering to the requirements of on-demand insurance. Prominent on-demand insurance companies are focusing on aggressively investing in various strategic initiatives, such as mergers and acquisitions, product launches, and partnerships to stay ahead of the competition and offer innovative solutions to their customers.

For instance, in July 2022, Zuno General Insurance Limited launched SWITCH, under the IRDAI's Sandbox initiative, the first comprehensive motor insurance product in India that can be obtained on-demand. SWITCH is a motor insurance policy that is entirely digital and based on mobile telematics. The policy is designed to detect motion and activate insurance coverage automatically when the vehicle is driven, providing customers with a convenient and hassle-free experience.

On-demand insurance providers are developing innovative insurance products that offer new coverage and benefits. For instance, some on-demand insurance providers offer coverage for specific events or activities, such as travel insurance that covers adventure sports or event cancellation insurance for music festivals. Additionally, on-demand insurance providers are increasingly offering personalized insurance policies tailored to individual customer needs.  Some prominent players in the global on-demand insurance market include:

• Slice Insurance Technologies Inc.

• VSure.life

• Xceedance, Inc.

• SkyWatch Insurance Services, Inc.

• Zuno General Insurance Limited

• JaSure

• Thimble

• JAUNTIN

• Cuvva

• Snap-it Cover

On-demand Insurance Market Report Scope

Global On-demand Insurance Market Report Segmentation

The report forecasts revenue growth at global, regional, & country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2017 to 2030. For the purpose of this study, Grand View Research has segmented the global on-demand insurance market report based on coverage, end-user, and region.

• Coverage Outlook (Revenue, USD Million, 2017 - 2030)

  • Car Insurance

  • Home Appliances Insurance

  • Entertainment Insurance

  • Contractor Insurance

  • Electronic Equipment Insurance

  • Others

• End-user Outlook (Revenue, USD Million, 2017 - 2030)

  • Individuals

  • Businesses

• Regional Outlook (Revenue, USD Million, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • U.K.

    • Germany

    • France

    • Italy

  • Asia Pacific

    • India

    • China

    • Japan

    • South Korea

    • Australia

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa

    • Kingdom of Saudi Arabia (KSA)

    • UAE

    • South Africa