Road to recovery: Expected increases in interest rates will boost investment gains, increasing industry revenue

An intensified focus on financial positions and net premium growth for liability insurance products have aided the Automobile Insurance industry in 2017. Operators also generate revenue by taking a portion of underwritten premiums and investing them in financial instruments. However, the beginning of the period saw the industry enter a price-hardening cycle, where auto insurance prices increased. The industry is likely to rotate into a softening price cycle over the five years to 2022 after having entered into a hardening price cycle during the majority of the prior period. This will lead to slower premium growth as operators lower premium prices to compete with one another to gain market share...purchase to read more.

Industry Statistics & Market Size
Revenue
$259bn
Annual Growth 12-17
2.6%
Forecast Growth 17-22
Profit
Employment
296,000
Businesses
8,691

Industry Threats & Opportunities

  • With the majority of auto insurer assets invested in bonds, expected increases in interest rates will boost investment gains
  • “Pay as you drive” products have become increasingly popular, which can help clients save
  • The industry’s investment income is expected to steadily improve as interest rates continue to rise
  • Industry Report - Starting a New Business Chapter

    The Automobile Insurance industry operates with high and steady barriers to entry. Obtaining sufficient start-up capital need to underwrite a diverse portfolio of policies needed to pool risk, while also complying with mounting regulatory requirements represent the most significant barriers to entry in the industry. Moreover, the auto insurance market is highly competitive, with brand recognition representing a crucial variable for a company's growth strategy. In addition, the market is also competitive across product lines, with most consumers willing to purchase a range of insurance products from one company. Consequently, to effectively compete with the industry's largest players, new entrants must be willing to underwrite both auto insurance and other types of insurance policies...purchase to read more.

    Additional Insights for the Automobile Insurance Industry

    IBISWorld identifies 250 Key Success Factors for a business.The most important for the Automobile Insurance Industry are

  • Ability to effectively manage risk
  • Management of a high-quality assets portfolio
  • Having a cost-effective distribution system
  • IBISWorld analysts also discuss how external factors such as Number of motor vehicle registrations and Number of vehicle accidents in the Automobile Insurance industry impact industry performance..

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    What's in this report

    What is the Automobile Insurance Industry?

    This industry underwrites or assumes the risk and assigns premiums for auto insurance policies. Car insurance provides financial protection against physical damage to automobiles and bodily injuries resulting from traffic incidents. Automobile insurance can also protect against resulting liability.

    Industry Products
  • Personal liability insurance
  • Personal collision/comprehensive insurance
  • Commercial liability insurance
  • Commercial collision/comprehensive insurance
  • Investment income
  • Industry Activities
  • Directly underwriting private passenger liability insurance
  • Directly underwriting private passenger collision/comprehensive insurance
  • Directly underwriting commercial liability insurance
  • Directly underwriting commercial collision/comprehensive insurance
  • Table of Contents

    Industry Definition
    Main Activities
    Similar Industries
    Additional Resources
    Industry Statistics Snapshot
    Industry Structure
    Executive Summary
    Executive Summary
    Key External Drivers
  • Number of motor vehicle registrations
  • Number of vehicle accidents
  • Per capita disposable income
  • Regulation for the Property, Casualty and Direct Insurance Industry
  • Natural disaster index

  • Current Performance
  • Renewals and market cycles
  • Product trends and consumer risk
  • Online dominance and concentration
  • Chart: Revenue Growth

  • Industry Outlook
  • Investment conditions improve
  • Product lines and market changes
  • Table: Automobile Insurance Industry Revenue Outlook

  • Industry Life Cycle
  • Life cycle reasons
  • Chart: Benchmarking - Automobile Insurance Industry Lifecycle vs The Economy

  • Supply Chains
    Key Buying Industries
  • Transportation and Warehousing
  • Consumers

  • Key Selling Industries
  • Insurance Brokers & Agencies
  • Reinsurance Carriers
  • Third-Party Administrators & Insurance Claims Adjusters

  • Products & Services
  • Personal liability insurance
  • Personal collision/comprehensive insurance
  • Investment income
  • Commercial liability insurance
  • Commercial collision/comprehensive insurance
  • Chart: Automobile Insurance Industry Products and Services Segmentation

  • Demand Determinants
    Major Markets
  • Drivers aged 24 and under
  • Drivers aged 35 to 44
  • Drivers aged 25 to 34
  • Drivers aged 45 to 54
  • Commercial market
  • Drivers aged 55 to 64
  • Drivers aged 65 to 74
  • Drivers aged 75+
  • Chart: Major Market Segmentation for the Automobile Insurance Industry

  • International Trade
    Business Locations
    Chart: Business Locations by State
    Market Share Concentration
    Key Success Factors
    Cost Structure Benchmarks
  • Profit
  • Loss and loss adjustment costs
  • Wages and depreciation
  • Other
  • Chart: Cost Structure Benchmarking – Sector vs Automobile Insurance

  • Basis of Competition
    Barriers to Entry
  • Table: Barrier to Entry Checklist for the Automobile Insurance Industry

  • Industry Globalization
    State Farm, Berkshire Hathaway Inc., Progressive Corp., The Allstate Corporation,
  • Table: State Farm - financial performance
  • Table: Berkshire Hathaway Inc. - financial performance
  • Table: Progressive Corp. - financial performance
  • Table: The Allstate Corporation - financial performance

  • Capital Intensity
  • Chart: Level of Capital Intensity for the Automobile Insurance Industry
  • Chart: Tools of the Trade: Growth Strategies for Success

  • Technology & Systems
    Revenue Volatility
  • Chart: Volatility vs Industry Growth

  • Regulation & Policy
    Industry Assistance
    Table: Industry Data for the Automobile Insurance Industry
    Includes:
  • Industry Revenue (2008-2022)
  • Industry Gross Product (2008-2022)
  • Establishments (2008-2022)
  • Businesses (2008-2022)
  • Employment (2008-2022)
  • Wages (2008-2022)
  • Number of motor vehicle registrations (2008-2022)

  • Table: Annual Percentage Change for Key Industry Data
    Table: Key Ratios for Industry Key Data
    Deductible
  • A specified amount of money the insured party must pay before its insurance company will pay a claim.
  • Hard Market
  • A cyclical occurrence in the auto insurance industry when premiums and profit rise.
  • Insurance Premium
  • A payment made by the insured party to the insurance company for coverage. Often called a premium, it is made in increments and is determined at the beginning of the policy term.
  • Liability
  • The insuring company's contractual obligation to the policyholder.
  • Soft Market
  • A cyclical occurrence in the auto insurance industry when premiums and profit decline.
  • Underwriting
  • The process where insurers assess the risks to insure and decide how much to charge for those risks.
  • What Our Customers Say

    Why buy this report?

    The Automobile Insurance industry market report contains data and analysis of the most influential current and future trends shaping the industry. IBISWorld’s in-depth industry market research is presented in a logical, user-friendly format, and provides growth and profit forecasts for a five-year outlook period.

    IBISWorld industry market research reports enable you to:
    • Find out about key industry trends
    • Identify threats and opportunities
    • Inform your decisions for marketing, strategy and planning
    • Quickly build competitive intelligence
    This report on Automobile Insurance:
    • Provides Market Size information to assist with planning and strategic decisions.
    • Includes the necessary information to perform SWOT, PEST and STEER analysis.
    • Helps you understand market dynamics to give you a deeper understanding of industry competition and the supply chain.
    • Analyses key performance and operational metrics so that you can benchmark against your own business, that of your customers’ businesses, or your competitors’ businesses.
    The Automobile Insurance market research report includes:
    • Historical data and analysis for the key drivers of this industry
    • A five-year forecast of the market and noted trends
    • Detailed research and segmentation for the main products and markets
    • An assessment of the competitive landscape and market shares for major companies
    • And of course, much more

    IBISWorld reports on thousands of industries around the world. Our clients rely on our information and data to stay up-to-date on industry trends across all industries. With this IBISWorld Industry Research Report on Automobile Insurance, you can expect thoroughly researched, reliable and current information that will help you to make faster, better business decisions.

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