In recent years, the online motor insurance market in India has experienced impressive growth, with significant expansion beyond traditional metro cities. According to Policybazaar, factors like improved digital penetration, better internet connectivity, and growing awareness about the affordability of online policies are driving the shift.
The growth of online motor insurance in India has varied across different city tiers. The data highlights a strong upward trend, particularly in smaller cities:
Cities that lead in online motor insurance purchases reflect India’s broader trend towards digitalization:
Certain car models are increasingly popular among online insurance buyers, particularly those favored by the younger, tech-savvy crowd. The most notable models include:
A standout trend in the online motor insurance sector is the rapid rise of electric vehicles (EVs). Online insurance policies for EVs grew by a staggering 423% in 2022 and 399% in 2023, making them the fastest-growing segment in the motor insurance industry.
This dramatic increase in EV insurance policies reflects a broader shift towards sustainable and digital-first solutions in the automotive sector.
While younger buyers dominate the online motor insurance space, the trend is becoming increasingly popular among older demographics as well. A significant majority of buyers are aged 25-40 years, with tech-savvy millennials and Gen Z consumers driving much of the demand.
However, older consumers (40+) are also becoming more comfortable with purchasing insurance online, indicating a growing trust in digital financial services.
Paras Pasricha, Head of Motor Insurance at Policybazaar, commented on the transformative shift, saying, “The rapid adoption of online motor insurance, particularly in tier-2 and tier-3 cities, signals a major change in how insurance is perceived and purchased across India. With increasing digital penetration, better internet access, and growing consumer awareness, online insurance is set to become the mainstream choice across both urban and rural areas.”
As digital-first platforms continue to improve accessibility and affordability, online motor insurance is expected to gain further momentum, reshaping the way consumers in India approach and purchase their policies.
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