How Has The Guaranteed Auto Protection (GAP) Insurance Market Size Evolved In Recent Years?
The guaranteed auto protection (gap) insurance market has seen considerable growth due to a variety of factors.
•The market size for guaranteed auto protection (GAP) insurance has seen significant growth lately. The projected rise is from $3.97 billion in 2024 to $4.38 billion in 2025, marking a compound annual growth rate (CAGR) of 10.3%.
The upward trend in the historical phase is linked to the surge in transportation needs, elevation in vehicle sales and increase in income levels.
What Is The Projected Growth Of The Guaranteed Auto Protection (GAP) Insurance Market?
The guaranteed auto protection (gap) insurance market is expected to maintain its strong growth trajectory in upcoming years.
• The market size for guaranteed auto protection (GAP) insurance is projected to expand quickly in the upcoming years. A growth to $6.48 billion is anticipated by 2029, with a compound annual growth rate (CAGR) of 10.3%.
The expansion during the forecast period can be credited to factors like the growth of online insurance platforms, a rising emphasis on tailored insurance solutions, the rise in alternative financing options, and entrance into budding markets. Noteworthy trends expected during the forecast period encompass the implementation of telematics and usage-based insurance (UBI), incorporation of artificial intelligence and machine learning, the launching of digital platforms, and strategic partnerships among leading players.
What Key Factors and Trends are Driving the Growth of the Guaranteed Auto Protection (GAP) Insurance Market?
The guaranteed auto protection (GAP) insurance market is witnessing growth, largely fuelled by rising vehicle sales. The escalation in vehicle sales can be attributed to factors such as the growing need for transportation, the view of vehicles as a status symbol, and climbing income levels among others. GAP insurance serves customers by bridging the gap between the current value of a vehicle (covered by regular insurance) and the actual amount owed on it, particularly in instances where there's severe damage or the vehicle is totalled due to an accident. For instance, projections by the Society of Motor Manufacturers and Traders (SMMT), a UK-centered trade association, indicate a 25.8% increase in passenger car sales in the UK from 140,958 units in 2022 to 177,266 units in 2023. Additionally, the International Organization of Motor Vehicle Manufacturers, a French trade association, reported that global passenger vehicle sales rose from 56.43 million units in 2021 to 57.48 million in 2022. Consequently, the upswing in vehicle sales is spurring on the growth of the GAP insurance market.
What are the Market Segments in the Guaranteed Auto Protection (GAP) Insurance Market?
The guaranteed auto protection (GAP) insurance market covered in this report is segmented –
1) By Type: Return-To-Invoice GAP Insurance, Finance GAP Insurance, Vehicle Replacement GAP Insurance, Return-To-Value GAP Insurance, Other Types
2) By Distribution Channel: Agents And Brokers, Direct Response, Other Distribution Channels
3) By Application: Passenger Vehicle, Commercial Vehicle
4) By End-User: Individuals, Corporates
Subsegments:
1) By Return-To-Invoice GAP Insurance: Standard Return-To-Invoice, Enhanced Return-To-Invoice
2) By Finance GAP Insurance: Loan GAP Insurance, Lease GAP Insurance
3) By Vehicle Replacement GAP Insurance: New Vehicle Replacement GAP, Used Vehicle Replacement GAP
4) By Return-To-Value GAP Insurance: market Value Return GAP, Actual Cash Value Return GAP
5) By Other Types: Theft Protection GAP, Specialty Vehicle GAP
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What Trends are Shaping the Guaranteed Auto Protection (GAP) Insurance Market?
Leading corporations in the guaranteed auto protection (GAP) insurance market are leveraging technologies such as optimal diamond distribution to improve risk evaluation, streamline the processing of claims, and enhance customer engagement. This approach aims to offer more personalized and efficient coverage to consumers. Optimal diamond distribution is a strategic method used in logistics and supply chain management to maximize the efficiency of product delivery. This strategy considers factors like demand trends, transport expenses, and stock levels to ensure goods are readily available where and when required. For example, in August 2024, the France-based insurance company, Opteven, introduced a combination of Return to Invoice and Financial Shortfall GAP Insurance. The coverage compensates for the gap between the insurance payout and the initial purchase price of the vehicle if it is determined to be a total loss due to circumstances like fire, theft, or water damage.
Who Are the Key Players in the Guaranteed Auto Protection (GAP) Insurance Market?
Major companies operating in the guaranteed auto protection (GAP) insurance market include:
• Berkshire Hathaway Inc.
• Axa S.A.
• State Farm Mutual Automobile Insurance Company
• Nationwide Mutual Insurance Company
• Allstate Insurance Company
• Liberty Mutual Insurance Company
• Progressive Casualty Insurance Company
• Zurich Insurance Group Ltd.
• Chubb Limited
• The Travelers Indemnity Company
• The Hartford Financial Services Group Inc.
• American Family Insurance
• Allianz SE
• Auto-Owners Insurance Group
• Arch Insurance Group Inc.
• Kemper Corporation
• Amica Mutual Insurance Company
• Erie Insurance
• Infinity Auto Insurance
• Admiral Group plc
• Esurance Insurance Services Inc.
• American Automobile Association Inc.
• Assurity Solutions
• Motor Gap Limited.
What are the Regional Insights into the Guaranteed Auto Protection (GAP) Insurance Market?
North America was the largest region in the guaranteed auto protection (GAP) insurance market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the guaranteed auto protection (GAP) insurance market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa
