Global Commercial Insurance Market Anticipated to Generate a Revenue of $661,743.0 Million, Growing at a CAGR of 8.1% from 2021 to 2028Download Sample Reports Overview
The global commercial insurance market size is estimated to be valued at $661,743.0 million by 2028, surging from $349,127.3 million in 2020, at a CAGR of 8.1%.
COVID-19 Impact on the Commercial Insurance Market
Various insurance brokerage firms in emerging countries like India have closed due to a drop-in client demand for insurance. The business insurance market has risen dramatically in recent years, but it is likely to face a modest fall in 2021 as a result of the COVID-19 pandemic and resume growth post the pandemic. This is due to the implementation of curfews by government agencies in most countries, as well as a rise in business insurance prices.
Global Commercial Insurance Market Analysis
Due to a growth in demand for commercial insurance policy among small and medium-sized firms, the commercial insurance market growth is expected to be witnessed post the pandemic settles. Furthermore, in the upcoming years, demand for insurance policies is expected to gradually increase, which is an important component in the global commercial insurance industry's strengthening. Furthermore, due to the large number of business insurance providers, the market is projected to have a positive impact during the forecast period. With so many insurance companies to choose from, there is fierce rivalry among them to provide a diversified range of coverages for a wide range of businesses.
Potentially high insurance premiums and a lack of commercial insurance awareness among small businesses are two factors that are hindering market expansion. The majority of small and micro businesses are ignorant of commercial insurance and the protection it provides. In the coming years, this disadvantage is expected to hinder market expansion.
The commercial insurance market is set to reach new heights as the number of small businesses grows and technology improves in the insurance industry. Several commercial insurers employ predictive analytics to acquire a lot of information in order to properly understand and forecast organizational risks and losses. The use of technologies is aimed at improving customers' trust and improve the company's value by providing advanced facilities, such as easy and effective insurance policies with reduced premium rates. Furthermore, due to government regulation mandating commercial insurance, the commercial insurance market is expected to provide varied opportunities during the forecast period.
Global Commercial Insurance Market, Segmentation
The global commercial insurance market is segmented based on type, enterprise size, distribution channel and region.
The type sub-segment is further classified into commercial motor insurance, commercial property insurance, cyber insurance, liability insurance (CGL (commercial general liability) insurance), marine insurance, and others. The commercial property insurance sub-segment is anticipated to garner a dominating market share in the global market and register a revenue of $2,22,228.0 million during the forecast period.
The market is expanding as a result of rising foreign direct investment in real estate and the rise of small and medium businesses (SMEs). Furthermore, profitable investment options and government programs encouraging businesses to obtain commercial property insurance have benefited the commercial property insurance sector. For instance, Union Budget 2021 increased FDI limit in insurance from 49% to 74%. India's Insurance Regulatory and Development Authority (IRDAI) has announced the issuance, through Digilocker, of digital insurance policies by insurance firms.
The enterprise size segment is further divided into large enterprises, medium-sized enterprises, and small enterprises sub-segments of which the small enterprises sub-segment is projected to grow at a faster CAGR during the forecast period. It is estimated that the market shall generate a revenue of $2,29,351.2 million by 2028, growing from $1,15,686.2 million in 2020, at a CAGR of 8.7%.
Small businesses are becoming increasingly reliant on commercial small business insurance policies to protect them from unforeseen losses. Litigation, property damage, liabilities, and workers' compensation claims are all covered by commercial insurance. These elements are expected to boost the sub-segment in the next years.
The distribution channel segment is further bifurcated into direct and indirect channel. Among these, direct channel sub-segment is anticipated to hold the maximum share of the global market revenue. The direct channel sub-segment is predicted to register a revenue of $4,07,518.2 million during the forecast period.
Advertising via traditional media, telemarketing, and the use of the internet to solicit business are all examples of direct response marketing. With the help of the internet, consumers may quickly compare policy benefits and pricing, particularly on various sites dedicated to comparing insurance prices. The direct response technique is the most cost effective for the consumer because marketing insurance services through them is considerably cheaper than through an agency network, and the competition is much broader.
The market for commercial insurance in Asia-Pacific is anticipated to be the fastest growing market and reach $2,11,029.8 million by 2028, with a CAGR of 9.1%.
The need for commercial insurance in the Asia-Pacific area is constantly expanding as the number of small businesses grows. The expansion of the commercial insurance market is likely to be aided by an increase in the number of SMEs, as well as the coverages offered by insurance providers in the region.
Key Players in the Global Commercial Insurance Market
- American International Group, Inc.
- Aon plc
- Chubb Limited
- Direct Line Insurance Group plc
- Willis Towers Watson
Along with the company profiles of the key players in the market, the report includes the Porter’s five forces model that gives deep insights into the competitive environment of the market.
Porter’s Five Forces Analysis for the Global Commercial Insurance Market:
- Bargaining Power of Suppliers: Commercial insurance market contains huge concentration of distributors and suppliers and hence, the distributors and supplier control is expected to be moderate, resulting in moderate bargaining power of dealers.
Hence, the bargaining power of the supplier is moderate.
- Bargaining Power of Buyers: Buyers will have high bargaining power, significantly because of high players operating in the commercial insurance market.
Hence, the bargaining power of the buyer is high.
- Threat of New Entrants: In the modern world, new entrants may face multiple new barriers, like legal and government policies.
Hence, the threat of the new entrants is moderate.
- Threat of Substitutes: There are few alternate products for commercial insurance.
Thus, the threat of substitutes is moderate.
- Competitive Rivalry in the Market: Robust presence of key players such as Chubb limited, Marsh, and AON plc is creating massive rivalry in the local as well as international market. Also, high spending on business expansion and strategic tie-ups are some of the main factors rising competitive rivalry among the companies.
Thus, the competitive rivalry in the market is high.