APAC’s guaranteed auto protection insurance market slated for 13.2% CAGR

Globally, the market is expected to grow from $3.2b in 2021 to $8b by 2031.

Asia-Pacific’s guaranteed auto protection (GAP) insurance market is expected to register a compound annual growth rate (CAGR) of 13.2% through 2031, driven by expanding car ownership and vehicle financing in major markets such as China, India, and Southeast Asia.

Regionally, North America held the largest market share in 2021 at about two-fifths of global revenue, revealed Allied Market Research.

Globally, the GAP insurance market is expected to grow from $3.2b in 2021 to $8b by 2031, representing a CAGR of 9.9%.

Global growth is being driven by increased awareness amongst car buyers, auto leasing firms, and self-financing companies of the need for protection against unexpected losses when a financed or leased vehicle is written off. 

Rising vehicle financing volumes are also boosting demand for GAP insurance policies.

However, the market still faces headwinds from strong competition, limited consumer understanding of GAP insurance benefits, and regulatory changes in policy rules.

By product type, finance GAP insurance accounted for the largest share in 2021, representing more than two-fifths of the market, and is expected to maintain its lead through 2031. 

The return-to-value GAP insurance segment is projected to grow fastest, with a CAGR of 14.2% during the same period.

In terms of application, passenger vehicles made up nearly three-fourths of the market in 2021, whilst the commercial vehicle segment is forecast to record the highest growth rate at 12.4%.