Guaranteed Auto Protection (GAP) insurance is a form of auto insurance that automobile owners can buy to safeguard themselves against losses that can occur if the amount of compensation obtained in the event of a total loss is insufficient to pay off the amount the insured owes under the finance or leasing arrangement for the vehicle. In addition, the gap between the amount owing and the amount protected by another insurance policy on a loan is covered by GAP insurance. Some GAP policies pay the deductible. For loans with minimal down payments, high interest rates, and amortization durations of at least 60 months, GAP insurance is promoted.
The growing anxiety among consumers about covering the expense of the difference between the loan amount and the vehicle's depreciated value is a major factor in the worldwide gap insurance market's revenue growth. Additionally, since car costs have depreciated over time and vehicle accidents have increased, gap insurance has become more and more necessary in order to cover outstanding sums. However, the market's expansion is likely to be hampered by large claims submitted as a result of increased automobile use which have put financial burden on insurance claims. In contrast, the expanding car sector and rising demand for insurance are two variables that are anticipated to continue to create lucrative opportunities for both established market participants and fresh entrants. Additionally, factors that are anticipated to promote market expansion include the availability of value-added online services and quick and easy claim settlement.
The Guaranteed Auto Protection (GAP) insurance market is segmented into type, application, distribution channel, and region. By type, the market is differentiated into return-to-invoice GAP insurance, finance GAP insurance, vehicle replacement GAP insurance, return-to-value GAP insurance and others. The application segment is segregated into passenger vehicle and commercial vehicle. The commercial vehicle is further segmented into light goods vehicle and heavy goods vehicle. The light goods vehicle is further segregated into new vehicle and used vehicle. Depending on distribution channel, it is fragmented into insurance agents/brokers, direct response and others. Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The Guaranteed Auto Protection (GAP) insurance market analysis includes top companies operating in the market such as Admiral Group Plc, Allianz, Allstate Insurance Company, American Family Insurance, Aviva, AXA, Berkshire Hathaway Inc., Chubb, Direct Gap, Kemper Corporation, Liberty Mutual Insurance Company, Majesco, Nationwide Mutual Insurance Company, Progressive Casualty Insurance Company, State Farm Mutual Automobile Insurance Company, The Travelers Idemnity Company, and Zurich. These players have adopted various strategies to increase their market penetration and strengthen their position in the data analytics in banking industry.
The growing anxiety among consumers about covering the expense of the difference between the loan amount and the vehicle's depreciated value is a major factor in the worldwide gap insurance market's revenue growth. Additionally, since car costs have depreciated over time and vehicle accidents have increased, gap insurance has become more and more necessary in order to cover outstanding sums. However, the market's expansion is likely to be hampered by large claims submitted as a result of increased automobile use which have put financial burden on insurance claims. In contrast, the expanding car sector and rising demand for insurance are two variables that are anticipated to continue to create lucrative opportunities for both established market participants and fresh entrants. Additionally, factors that are anticipated to promote market expansion include the availability of value-added online services and quick and easy claim settlement.
The Guaranteed Auto Protection (GAP) insurance market is segmented into type, application, distribution channel, and region. By type, the market is differentiated into return-to-invoice GAP insurance, finance GAP insurance, vehicle replacement GAP insurance, return-to-value GAP insurance and others. The application segment is segregated into passenger vehicle and commercial vehicle. The commercial vehicle is further segmented into light goods vehicle and heavy goods vehicle. The light goods vehicle is further segregated into new vehicle and used vehicle. Depending on distribution channel, it is fragmented into insurance agents/brokers, direct response and others. Region wise, the market is analyzed across North America, Europe, Asia-Pacific, and LAMEA.
The Guaranteed Auto Protection (GAP) insurance market analysis includes top companies operating in the market such as Admiral Group Plc, Allianz, Allstate Insurance Company, American Family Insurance, Aviva, AXA, Berkshire Hathaway Inc., Chubb, Direct Gap, Kemper Corporation, Liberty Mutual Insurance Company, Majesco, Nationwide Mutual Insurance Company, Progressive Casualty Insurance Company, State Farm Mutual Automobile Insurance Company, The Travelers Idemnity Company, and Zurich. These players have adopted various strategies to increase their market penetration and strengthen their position in the data analytics in banking industry.
KEY BENEFITS FOR STAKEHOLDERS
- The study provides in-depth analysis of the GAP insurance market along with the current trends and future estimations to illustrate the imminent investment pockets.
- Information about key drivers, restrains, & opportunities and their impact analysis on the GAP insurance market size are provided in the report.
- The Porter’s five forces analysis illustrates the potency of buyers and suppliers operating in the industry.
- The quantitative analysis of the GAP insurance market from 2021 to 2031 is provided to determine the market potential.
Key Market Segments
By Type
- Return-to-Invoice GAP Insurance
- Finance GAP Insurance
- Vehicle Replacement GAP Insurance
- Return-to-Value GAP Insurance
- Others
By Application
- Passenger Vehicle
- Commercial Vehicle
By Distribution Channel
- Agents Brokers
- Direct Response
- Others
By Region
- North America
- U.S.
- Canada
- Europe
- Germany
- France
- U.K.
- Italy
- Spain
- Netherlands
- Belgium
- Rest of Europe
- Asia-Pacific
- China
- Japan
- India
- Australia
- South Korea
- Indonesia
- Thailand
- Rest of Asia-Pacific
- LAMEA
- Latin America
- Middle East
- Africa
Key Market Players
- Admiral Group PLC
- Allianz
- Allstate Insurance Company
- American Family Insurance
- Aviva
- AXA
- Berkshire Hathaway Inc.
- Chubb
- Direct Gap
- Kemper Corporation
- Liberty Mutual Insurance Company
- Majesco
- Nationwide Mutual Insurance Company
- Progressive Casualty Insurance Company
- State Farm Mutual Automobile Insurance Company
- The Travelers Idemnity Company
- Zurich
Table of Contents
CHAPTER 1: INTRODUCTION
CHAPTER 2: EXECUTIVE SUMMARY
CHAPTER 3: MARKET OVERVIEW
CHAPTER 4: GUARANTEED AUTO PROTECTION (GAP) INSURANCE MARKET, BY TYPE
CHAPTER 5: GUARANTEED AUTO PROTECTION (GAP) INSURANCE MARKET, BY APPLICATION
CHAPTER 6: GUARANTEED AUTO PROTECTION (GAP) INSURANCE MARKET, BY DISTRIBUTION CHANNEL
CHAPTER 7: GUARANTEED AUTO PROTECTION (GAP) INSURANCE MARKET, BY REGION
CHAPTER 8: COMPANY LANDSCAPE
CHAPTER 9: COMPANY PROFILES
List of Tables
List of Figures
Executive Summary
According to the report, titled, “Guaranteed Auto Protection (GAP) Insurance Market," the guaranteed auto protection (gap) insurance market was valued at $3.2 billion in 2021, and is estimated to reach $8 billion by 2031, growing at a CAGR of 9.9% from 2022 to 2031.Increase in awareness of self-financing firms & auto leasing dealers, in terms of protection against unexpected losses caused by borrowers compels owners & buyers to purchase GAP insurance policy, which fuels the GAP insurance market growth. However, increased competition, a lack of knowledge about the advantages of guaranteed car protection insurance, and changes in policy rules are some of the issues that limit market expansion. The surge in popularity and demand for vehicle finance, on the other hand, heavily favors GAP insurance coverages which drives the growth of guaranteed auto protection insurance market. Therefore, these aspects are anticipated to present prospects to GAP insurance market in upcoming years.
Furthermore, increasing technological advancements in insurance industry by key players is expected to boost the growth of the market in upcoming years. For instance, Tata AIG General Insurance unveiled its "AutoSafe" telematics-based software in June 2020. By monitoring policyholders' mileage, promoting safe driving, and providing a GPS monitoring facility for anti-theft tools, this program improves their ability to reduce portion of their premium. The program also provides various value-added products including coverage for no claims, regular payments, and depreciation reimbursement. It enables insurers to monitor the driving habits of those who insure their cars, hence lowering the market's claim rates for GAP insurance.
By application, the passenger vehicle segment acquired major share of GAP insurance market size. This is attributed to surge in demand for passenger vehicle among consumers and rise in the production of total units of passenger cars globally as compared to commercial vehicles.
Region wise, North America dominated the market in 2021 in GAP insurance market analysis. This is attributed to the fact that increase in e-commerce business has further accelerated commercial vehicles demand for transportation of goods and services. Vehicle owners are purchasing auto insurance with GAP insurance to cover their losses incurred due to accidents, reimburse the costs of vehicle repairs following a crash, medical costs, lost wages, and even legal expenses.
The demand for guaranteed auto protection (GAP) insurance has decreased considerably during the COVID-19 pandemic. Due to strict lockdown regulations throughout all nations, automobile sales have drastically decreased, and the pandemic has had an impact on the selling of auto insurance. Additionally, a number of automobile dealers have temporarily shut down their operations due to a fall in the volume of new policy sales. Thus, these factors hampered the growth of the GAP insurance industry during the pandemic situation.
Key Findings of the Study
- By type, the finance GAP insurance segment led the highest GAP insurance market share, in terms of revenue in 2021.
- On the basis of application, the commercial vehicle segment is expected to exhibit the fastest growth rate during the forecast period in GAP insurance market.
- Region wise, North America generated the highest revenue in 2021.
- The key players operating in the Guaranteed Auto Protection (GAP) insurance market analysis include Admiral Group Plc, Allianz, Allstate Insurance Company, American Family Insurance, Aviva, AXA, Berkshire Hathaway Inc., Chubb, Direct Gap, Kemper Corporation, Liberty Mutual Insurance Company, Majesco, Nationwide Mutual Insurance Company, Progressive Casualty Insurance Company, State Farm Mutual Automobile Insurance Company, The Travelers Idemnity Company, and Zurich. These players have adopted various strategies to increase their market penetration and strengthen their position in the industry.
Companies Mentioned
- Admiral Group plc
- Allianz
- Allstate Insurance Company
- American Family Insurance
- Aviva
- Axa
- Berkshire Hathaway Inc.
- Chubb
- Direct Gap
- Kemper Corporation
- Liberty Mutual Insurance Company
- Majesco
- Nationwide Mutual Insurance Company
- Progressive Casualty Insurance Company
- State Farm Mutual Automobile Insurance Company
- The Travelers Idemnity Company
- Zurich
Methodology
The analyst offers exhaustive research and analysis based on a wide variety of factual inputs, which largely include interviews with industry participants, reliable statistics, and regional intelligence. The in-house industry experts play an instrumental role in designing analytic tools and models, tailored to the requirements of a particular industry segment. The primary research efforts include reaching out participants through mail, tele-conversations, referrals, professional networks, and face-to-face interactions.
They are also in professional corporate relations with various companies that allow them greater flexibility for reaching out to industry participants and commentators for interviews and discussions.
They also refer to a broad array of industry sources for their secondary research, which typically include; however, not limited to:
- Company SEC filings, annual reports, company websites, broker & financial reports, and investor presentations for competitive scenario and shape of the industry
- Scientific and technical writings for product information and related preemptions
- Regional government and statistical databases for macro analysis
- Authentic news articles and other related releases for market evaluation
- Internal and external proprietary databases, key market indicators, and relevant press releases for market estimates and forecast
Furthermore, the accuracy of the data will be analyzed and validated by conducting additional primaries with various industry experts and KOLs. They also provide robust post-sales support to clients.
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