Over the last three years, online motor insurance has witnessed high growth across cities, driven by increasing digital adoption and changing customer preferences. Tier-1 cities, including major metros, have maintained a steady 35 per cent growth, showcasing the consistent reliance on digital platforms for insurance needs. Meanwhile, Tier-2 cities have experienced a significant 70 per cent increase, driven by rising internet penetration, better access to digital tools, and growing awareness about the cost-effectiveness of online insurance.
The most remarkable growth has been in Tier-3 cities and rural areas, which saw a staggering 110 per cent surge. This growth reflects insurers’ focused efforts to penetrate underserved regions and the growing trust in online platforms among these segments, as revealed by data from PolicyBazaar, an insurance web aggregator.
Online motor insurance is particularly popular among younger demographics, with a majority of buyers aged 25-40. This aligns with the digital habits of Millennials and Gen Z, who prefer the convenience of online transactions.
Electric vehicles (EVs) have emerged as a standout segment, registering high growth. Online EV insurance policies grew by 423 per cent in 2022 and 399% in 2023, making EVs the fastest-growing category in motor insurance. This growth is attributed to the availability of tailored policies for EV owners, reflecting a broader shift toward eco-conscious and digitally enabled solutions.
Delhi leads the online motor insurance landscape with an 8.1 per cent share, showcasing its dominance as a digitally active market. Bangalore follows with a 4.4 per cent share, and Mumbai accounts for 2.1 per cent, highlighting the strong presence of tech-savvy customers in urban areas. Emerging hubs like Pune and Lucknow, with a 1.9 per cent share each, indicate rising adoption in Tier-2 cities.
Certain car models dominate the online insurance market, reflecting their popularity among digitally active consumers. The Maruti Wagon R and Maruti Swift top the list with a 5.9 per cent share each, followed by the Hyundai i20 at 4.4 per cent and the Maruti Baleno at 4.3 per cent, appealing to those seeking a blend of affordability and premium features. The Maruti Alto, with a 4.2 per cent share, continues to highlight the relevance of mass-market vehicles in the online insurance space.