Shifting gears in a changing landscape

While the century-old concept of motor insurance is familiar, this dynamic market has undergone rapid change, impacted by forces including the COVID-19 pandemic and its influence on mobility patterns and claims inflation; telematics and the rise of the sharing economy; the proliferation of electric vehicles (EV); introduction of new safety features such as advanced driving assistance systems (ADAS) and, more recently, autonomous driving; and legal and regulatory change. 

At Swiss Re, we have supported our clients since 1901, the year we wrote our first motor reinsurance agreement (see image below). Nearly 125 years later, we continue to gather and disseminate insights about critical lines of business, to improve our underwriting decisions and to support clients.

Motor insurance is a strategic business for our clients, given its compulsory nature and status as the largest Property & Casualty (P&C) line of business. Given its importance, Swiss Re's Casualty Reinsurance Department recently conducted a review of the global motor insurance landscape. This resulting report, which explores several key trends that are impacting the motor insurance business, is aimed at C-suite decision-makers, motor underwriters and brokers covering the casualty and motor sector.

Based on our global analysis of motor insurance from multiple sources, several trends merit closer scrutiny by primary insurers and reinsurers:

• Swiss Re's near-term global outlook for motor insurance is relatively positive with some country specific nuances as the industry works through the impacts of COVID-19-related inflation, but competition levels are increasing after price corrections
• The introduction of new tariffs will materially impact claims severity and significantly drive-up repair costs as inventories of spare auto parts diminish. This will also increase the time taken to undertake repairs whilst manufacturers set up local operations and supply chains come under pressure.
• Medical inflation is on the rise, with many countries experiencing significant increases, including in India, Europe and the United States.
• The rising complexity of modern vehicles will likely continue to drive maintenance and repair costs higher in the short-term. However, over the long-term advanced safety features, including ADAS, have the potential to reduce accident frequency, which would have a favourable impact on motor insurance profitability globally
• As total distance driven recovers from pandemic-related lows, higher speeds on the roads and distracted drivers have contributed to greater accident severity and higher fatality rates even as new safety features exert downward pressure on accident frequency
• Motor insurance in emerging economies like India is also changing, as rising affluency, the proliferation of higher-value vehicles and electric vehicles, and litigiousness pose potential challenges to what has historically been a profitable line of business
• China's rapidly expanding EV fleet and the development of its insurance market offer an interesting model for insurers elsewhere to watch closely, as they anticipate similar changes in their own markets
• Intensifying weather-related perils may so far be insufficiently reflected in premiums, driving greater motor-own damage losses
• Commercial motor performance remains impacted by inadequate rates and challenges like social inflation in the US that are driving up litigation costs. The role of changing demographics is also a consideration, as experienced workers retire and less experienced commercial operators fill jobs, including in delivery services

The pandemic was a well-documented shock to the motor insurance system. While 2020 combined ratios dipped below historic levels, inflation and supply chain challenges quickly began weighing on results. Insurers responded by raising premiums.

With the pandemic now in the rear-view mirror, we were anticipating that the motor market would revert to more normal dynamics over the next 18 months, However, the introduction of new tariffs will likely cause claims cost to rise and consequently lead to a reversal of the recent reductions we've seen in motor premiums.

Before the emerging trade wars and associated tariffs came sharply into focus in April 2025, the motor insurance market had seen improved profitability and signs of increased competition had emerged. The uncertainty about how global trade policies may impact supply chains, claims losses and inflation is now front of mind for motor insurers. The upshot is, this competitive market's challenges persist and are being joined by new ones, as mobility undergoes a dramatic transformation. With volatility that accompanies such changes, our midterm-view calls for more caution.

Worldwide light vehicle sales rose to nearly 90 million units in 2024 according to a report by S&P Global Mobility. The collective fleet now on the roads represents the most diverse assortment of vehicles since the automobile's invention. Despite this vast diversity, however, these cars and trucks have something important in common: virtually all of them, and their owners and drivers, are covered by a compulsory insurance policy.  

Without insurance, risk of accidents and their potentially crippling financial losses would be too much for vehicle owners to shoulder on their own. For P&C insurers and reinsurers, the significance of motor insurance cannot be overstated, either: globally, premiums collected from personal and commercial vehicle owners make up about 40% of the USD 2.2 trillion P&C market (see figure 1).

These premiums range from coverage for motor third-party liability (MTPL) for property damage and bodily injuries suffered by third parties in vehicle accidents, as well as motor-own damage (MOD) protecting against harm to a driver's own vehicle, including natural catastrophes like hail and floods as well as no-fault schemes for bodily injuries. 

Motor insurance is highly strategic but a very competitive market, with historically low volatility and low margins. As an entry product, it is an enabler for insurers to deepen their relationships with clients via other insurance products. Motor insurance's underlying volatility overall is lower than with other lines of insurance, too. However, recent inflation spikes and the impact of extreme weather events on motor own damage are stressing volatility in the motor sector in many countries. That said, globally, less than 5% of the motor insurance risk pool is ceded to reinsurers.  

Still, reinsurance plays an important role. Motivations among primary insurers to enter into proportional and non-proportional reinsurance treaties include requirements for capital relief, boosting underwriting capacity and helping insurers reduce volatility, especially in geographies where there may be high or unlimited compulsory third-party bodily injury (TPBI) limits. 

With non-proportional reinsurance, primary insurers rely on reinsurance to manage their risk appetite in key areas, including:

• Reducing volatility from high or unlimited compulsory TPBI limits
• Managing risks associated with changes in statutory compensation rates
• And to protect themselves from volatility that comes with natural catastrophes like floods, hail or other events that can quickly impact hundreds or even thousands of vehicles at once.

Viewed globally, personal motor insurance profitability is structurally challenging (see figure 2), with highly competitive markets where consumers can easily compare prices. Often, it relies on investment income to compensate for technical underwriting losses. Compulsory third-party liability insurance is used as a means of acquiring clients, with profits generated through the sale of ancillary products and through other lines of business.

While mainly driven by local dynamics, the sector is vulnerable to global shocks, with COVID-19 a recent example: during lockdowns, many drivers remained home, reducing their mileage and the frequency of minor accidents. Some insurers offered significant discounts as people drove less.

With pandemic-related supply chain disruptions and a sudden jump in prices, there was a shortage of spare parts and rising repair costs. This had a significant impact on profitability of motor insurance in many regions, with combined ratios rising to the highest levels in more than a decade (see figure 3). For example, US personal motor insurers lost a cumulative USD 53 billion in 2022-23 according to the Swiss Re Institute. In response, insurers increased premium rates once state regulators approved the rate increases, to help restore underwriting results. At the start of 2025 rate increases had slowed, largely due to disinflation, improved underwriting performance, and increased competition. However, vehicle repair costs are set to rise significantly due to newly introduced tariffs and increased claims costs will need to be factored into pricing models. This is expected to result in rate hikes of at least 8% for motor insurance by the end of 2025 according to Insurify, an American insurance comparison site.

Historically, primary motor insurance business performance has been largely driven by local market conditions, including the impact of legal changes on in-force portfolios, impacts from new market entrants, and – with the intensification of weather-related hazards that have struck areas that have experienced population growth, urbanisation and the accumulation of valuable assets including vehicles – natural catastrophes. Some specific local drivers include:  

In the UK, the Ogden discount rate plays a crucial role in shaping the performance of motor third party liability for bodily injury claims. Reviewed at least every five years, it's used to calculate lump-sum compensation payments for long-term injury claims, ensuring they receive fair settlements while still accounting for investment returns. A recent change in the Ogden rate that took effect in December 2024 should ease the pressure on UK non-life underwriting results.  

In the US, state regulation of insurance can impact insurers' ability to adjust rates as they balance consumer protection with the business interests of insurers. In some instances, this can lead to slower implementation of rate adjustments, with more abrupt increases in rates when changes are approved. 

The role of telematics varies from market to market. In the US, it is often used to calculate premium levels based on driving behaviour, while in the UK it is a tool that helps enable insurance coverage for younger, less experienced drivers; in Italy, telematics has been deployed to help clarify claims and as a defense against theft mainly through black-box or other installed devices, while South African insurers have used telematics as a way to reward safe behaviour with discounts and benefits through an ecosystem of service providers, and to enhance cross-selling and engagement. 

The EU's motor insurance directive has established the framework for those holding a compulsory motor insurance policy in the 27-member bloc, governing broad-ranging areas including minimum third-party liability cover and the pace of claims settlement while leaving issues of civil liability and the calculation of compensation awards to individual countries. 

In the United States, commercial motor insurance has been challenging, a trend likely to continue given the market remains a focus for plaintiffs' lawyers. Social inflation plays an outsized role, having added some USD 20 billion to commercial auto liability claims from 2010 to 2019, according to a 2022 study by the Insurance Information Institute and the Casualty Actuarial Society (CAS). 

Demographics may be important to consider, with a generational change among commercial motor operators occurring and younger, less experienced people filling driving roles especially in the trucking sector (see figure 6); studies have found that the first year of driving a commercial vehicle is riskier in terms of crash rates, crash involvement, and moving violations, regardless of age. Despite material commercial motor rate increases since 2015, profitability has yet to be restored (see figures 4&5). 

Health expenses and medical inflation: The costs of health and medical care for people who have suffered bodily injury in a vehicle accident are expected to continue to increase, particularly in regions where medical personnel shortages are expected to intensify.  

Medical costs in China, for example, are expected to rise by almost 11%, marking a second consecutive year of double-digit increases. Furthermore, medical costs in India increased by over 12% in 2024 and could go higher in 2025 due to medical technology costs and rising healthcare demand. Asia-Pacific is not alone, according to US government figures, there will be a shortfall across nursing staff, long-term care services and among physicians, with the gap intensifying between now and 2037. Other markets including Germany and the UK also report health and medical staff shortages that may exert increasing pressure on costs. As indicated in the chart above, health inflation in the UK and Germany rose in 2024 to around 6% and 2.8%, respectively (see figure 7).

Repair costs: While inflation and supply chain challenges have moderated since their COVID-19 peak, repair costs remain high, resulting in pressure on claims (see figure 10). This will be further impacted by auto tariffs being imposed on vehicle parts coming into the US, and retaliatory tariffs on US exported vehicle parts will only exacerbate the impact. Much of the car repair market is heavily reliant on imports, for example in February the American Property Casualty Insurance Association (APCIA) reported that 6 out of every 10 auto replacements parts used in US auto shop repairs are imported from Mexico, Canada and China. The US itself exports over USD 41 billion in motor vehicle parts and accessories, and this will add to repair costs globally, especially in countries that receive the goods including Mexico, Canada, Australia, China and Germany. Additionally, APCIA estimates that personal auto insurance claims costs alone could increase by between USD 7 billion and 24 billion annually. The tariffs will also increase the costs of imported new cars worldwide and this will have a knock-on impact on the price of used cars which will also need to be accounted for in actuarial models.

As well as driving up repair costs, the tariffs will also result in increased total loss determinations as vehicles become too expensive to repair from a financial standpoint. The tariffs will also upend supply chains and as inventories of spare parts shrink repair costs will be pushed higher. The previous tariffs from 2018 were factored into pricing models for certain auto insurance programmes and rate adequacy will need to be reassessed to account for the new tariffs in 2025. Insurify projects the average annual cost of full-coverage car insurance will climb 19% by the end of 2025. Additionally, a decline in cross-border freight traffic will further impact commercial motor insurance, potentially limiting premium growth.

Moreover, the increasing sophistication of 21st century vehicles and the complexity of repairs add to pressure on motor insurers' costs.  With EV sales forecast to grow 30% annually up to 2030, studies in the US, Germany and UK have all indicated differing views on repair costs, including those linked to accidents, for EV (further information on insuring EV is available from the Swiss Re Institute). This may change over time, however as scale is reached by mass-market EV car makers. In the US, Mitchell, a Enlyte company, reports that claims severity between EV and newer internal combustion engine (ICE) vehicles is narrowing. Last year the average severity of newer ICE vehicles with more technology onboard was USD 6,127 compared to the average claims severity for repairable EV which was USD 6,236 in the US, a 3% decrease year on year. However, Germany and the UK report that repairing an EV is as much as 35% higher than ICE vehicles and can take 14% longer. However, it's important to note that all vehicles are getting more complex in terms of high-tech features and sophisticated electronics that are expensive to replace. Furthermore as the insurance industry becomes more familiar with EV it will allow for better assessment of repair needs and more competitive pricing for coverage. 

Coverage changes: Different countries have varying regulations regarding minimum cover requirements, which can significantly impact insurance coverage. In the US for example, several states, including California, North Carolina, Virginia, Maryland and Utah are increasing minimum coverage requirements, the first such update in 56 years. While these adjustments reflect rising accident costs, they could lead to increased premiums for those drivers that carry minimum coverage as well as the potential for more aggressive litigation, if higher coverage boosts the incentive for more lawsuits. Similarly in Germany, there have been discussions about adjusting minimum coverage limits to better reflect current vehicle repair costs and safety standards. 

In the UK however, changes to the whiplash reform should result in a reduction in premium levels as all whiplash and minor psychological injuries lasting less than two years will be compensated under a fixed tariff (see figure 12).

Traditionally, in developing countries like India policy wording, structures and premiums have been standardised and governed by high tariff regulation. However, since 2007 the Insurance Regulatory and Development Authority of India (IRDAI) has started to detariff motor insurance starting with motor own damage insurance, allowing insurers the freedom to set their own premium rates based on market conditions and risk assessments, however motor third party liability remains regulated. This transition has also heightened competition and resulted in a wider range of motor insurance products, including usage-based insurance, add-on covers and multi-year policies for motorcyclists, as well as technological advancements, such as telematics to enhance underwriting process and assess risk more accurately. The competitive landscape has also led to challenges, including increased instances of fraudulent claims, which can be as high as 15-20% in some countries, necessitating robust claims management processes.  A similar scenario played out in China from 2006 when the China Insurance Regulatory Commission (CIRC) initiated a gradual deregulation process, allowing insurers more flexibility in pricing motor insurance products and has led to innovation in product offerings, including customised policies and usage-based insurance plans.

Drive time and accident frequency: Despite a sharp initial recovery in mileage driven as COVID-19 lockdowns were eased, distance driven in many markets still has not returned to the levels of 2019 (see figure 11). This comes, at least in part, from persistent workplace changes including home office. Although the trend to bring employees back to the office could see distances driven increase in future years. Simultaneously, safety improvements in cars – notably linked to ADAS for new vehicles like those already in effect in the EU or US rules due to take effect come 2029 requiring automatic emergency braking systems – have potential to reduce accident frequency over a longer time horizon. That said in many countries, such as Germany and the US the increased level of accidents from distracted drivers through factors such as in-car technologies, mobile phone use, eating and drinking and even grooming, is a concerning trend for insurers and reinsurers. 

In growing economies like India road safety is a pressing concern. Despite a comparable average driver distance to European countries, the number of road accidents and fatalities in India has reached new heights claiming between 150,000 to 178,000 lives each year predominantly due to parked trucks, lane discipline, motor cyclists not wearing helmets and indifference to traffic laws. However, national road safety policies, technology, and public engagement, should help to reduce road accidents in future years. In China however, which has seen a rapid increase in vehicles, drivers and road mileage, the number of major accidents and fatalities saw a significant year-on-year decrease of nearly 50% in 2024, according to the ministry of emergency management. 

Interest rates: The general economic uncertainty induced by escalating trade tensions is likely to delay buying and investment decisions by business and consumers (see figure 8).

Central banks will continue to lower interest rates in 2025, with trade tensions posing a larger asymmetric impact on economic growth than inflation. In particular the euro area and China will see relatively lower interest rates compared to the US, which will impact insurers' investment returns, including those of motor insurers.

However, long-dated government bond yields are likely to still see a natural floor both in the US (stubborn inflation and rising inflation expectations) and Europe (greater fiscal spending, especially in Germany) and will remain elevated relative to the rates seen over the decade prior COVID-19. 

Intensifying hazards: Increasing weather-related natural catastrophe losses challenge the profitability of insurers’ motor books that already experience thin margins amidst high competition. For instance, the hailstorm in Calgary, Canada in August 2024 caused significant motor losses and estimates put the insured auto losses from this event at approximately CAD 1 billion. Moreover, intense hailstorms in Europe, North America and Asia in recent years have caused widespread damage including to vehicles, in some instances resulting in losses that far exceeded original expectations. In India motor insurance claims spike by as much as 40% during monsoon season between June and September due to an increase in accidents and vehicle own damage. Another case in point is the unexpected floods in Dubai last year that damaged thousands of vehicles. Like the recent LA wildfires the short evacuation lead time, coupled with the high value assets in Dubai led to a larger than usual motor proportion on the total loss. Furthermore, many residents in Dubai worried about possible hail damage parked their cars in underground garages that made them extremely vulnerable to flood, which ultimately exacerbated the motor insurance losses.

Over the next two decades, motor insurance and companies that offer this protection will need to evolve to rise to the challenges and opportunities associated with a mobility sector undergoing rapid transformation. Vehicles of the future will be more connected, autonomous, shared and electric (CASE), and insurance must be tailored to fit this new reality. 

Connected: The increased penetration of telematics will allow insurers that leverage the vast volumes of driving data being produced – by 2023, insurers had already received data from more than 20 million connected vehicles and drivers globally – to glean even greater insights about driver behaviours (see figure 13&14). This can help them better mitigate risks and improve the performance of their motor portfolios, something that insurers deploying this technology have already demonstrated after more than a decade of experience.

Autonomous: While estimates vary, some predict as many as 25% or more of new vehicles sold by 2040 will be either semi- or fully autonomous vehicles (AV) (see figure 15). Consequently, we may see a shift to product liability insurance over the medium term. This will likely impact not only AV producers but their suppliers, as well, including those who provide artificial intelligence (AI) systems that guide a new generation of self-driving cars. Still, there is evidence that autonomous vehicles may be safer than even advanced human-driven vehicles, a study by Swiss Re and Waymo indicates 88% reduction in property damage claims and 92% reduction in bodily injury claims associated with autonomous driving. One area for insurers to watch includes consumer perceptions about who is at fault when an AV is involved in an accident.

Shared: Car ownership itself is changing, spurred in part by the expansion of the so-called sharing economy (see figure 16). Sharing economy business models imply a shift of operational risks, and a need for new types of protection coverage. Generational shifts support this, as well, with younger Gen Z consumers indicating that car ownership is less of a priority for them than it is for older Baby Boomers, at least for now. Even so, we expect vehicle-sharing to account for only a fractional shift in premium revenue from personal to commercial motor insurance lines, which is seen as more than doubling to USD 390 billion in global revenue by 2033, according to Allied Market Research. Despite underperformance in recent years due to social inflation, commercial motor has a path to profitability built on investing in technology to collect data and improve understanding of risk.

Electric: With vehicle transportation among the largest current sources of greenhouse gas emissions, carbon-dioxide (CO2) reduction ambitions laid out by the 2015 Paris agreement have boosted sales of hybrid and battery electric vehicles. Battery electric passenger vehicle (BEV) sales in 2025 are expected to reach about 15.1 million units, according to some estimates, which would represent a 30% rise from 2024 levels; by 2035, half of all vehicle sales could be EV. China is currently leading the way, as sales of all types of electrical vehicles there (including buses, passenger cars, and trucks) rose 4.5% in 2024 to 31.4 million units. 

Globally, the sophistication of EV now contributes to higher repair costs and increased insurer losses. According to a report published by Thatcham in 2023, the cost of repairing a BEV in the UK can be 25% higher than a car powered by an ICE due to lack of specialised repair network, higher replace-to-repair ratio and drawn-out spare part delivery. And, according to a 2024 report published by the German Insurers' Association, each EV claim costs up to 25% more on average than comparable ICE vehicles. Furthermore, batteries are a significant factor in claims severity and in the most serious incidents, when EV catch fire they are harder to extinguish than ICE vehicles and the risk of reignition is higher.  

Worryingly EV drivers tend to have a higher frequency of claims, in China we see that the accident rate for EV is almost double the rate of ICE vehicles. Part of the reason is a bigger share of EV driving on roads for commercial use, including ride sharing, and the difference in vehicle handling that take time to adapt to because they accelerate more quickly. The statistics clearly show that in the first year, frequency and therefore loss ratios are higher. However, on the plus side ADAS will reduce accidents, both in EV and ICE vehicles. In fact, the US National Highway Traffic Safety Administration predicts that if all vehicles are equipped with effective ADAS technology, 62% of total traffic deaths could be prevented. A study in the US also found that ADAS could reduce accident frequency by over 23%. 

However, many of the factors driving up EV losses are short-term. As they become more prevalent and drivers adapt to differences in the way EV handle and accelerate, and garages get more used to repairing EV, they should be able to reduce the repair time and cost. This means that the loss ratio between ICE vehicles and EV will likely close in time especially with standardisation of parts, advancements in diagnostic tools, wider availability of trained technicians and advancements in battery technology.  Recent information from the Insurance Association of China indicates that the severity of EV incidents is lower than that of ICE vehicles. This is likely due to the large-scale production of mass-market EV, which has reduced the cost of repairs.

AI is undoubtedly changing the way we think about cars and driver safety. AI helps cars to see the road, make decisions and drive safely, thanks to ADAS like emergency breaking, collision detection and lane-keeping systems that react faster than humans and can prevent accidents. Research has shown that AI-powered automated braking systems alone can reduce rear-end collisions by up to 50%. 

In addition, AI is equipping insurers with new capabilities that are helping reshape the motor insurance industry. One of the most significant impacts is that it will allow underwriters to analyse far more granular data, enabling risk assessment on data from connected vehicles, driving habits, routes and time of day for example. By analysing driving habits through telematics data, AI will enable insurers to further personalise and dynamically adjust premiums based on individual risk levels. Telematics has also advanced considerably since they were introduced in the 1990s and now can use video-based technology, such as computer vision, to more accurately assess driving behaviour, predict accidents and reconstruct driving incidents.  However, the uptake of telematics-based insurance products is still limited, but according to research from consulting firm Berg Insights, the number of insurance telematics policies in force in Europe and North America will reach 43.9 million by 2028. The benefits of telematics will need to be evaluated alongside ethical considerations ensuring fleet and consumer data is handled confidentially and avoids biases coming into the underwriting process. 

AI algorithms are being used to identify anomalies and flag potential fraudulent claims. Fraud in motor insurance can range from exaggerated claims, ghost accidents, staged accidents and false theft reports. Allianz has reported that it uncovered more than 33,000 examples of insurance fraud in 2024 worth over GBP 154 million, up 10% year-on-year. Although AI is helping make bogus claims more difficult to detect, the same technology is being used by insurers to flag suspicious claims for future investigation in real-time. For example, AI is being used to compare new claims with historical data, recognise specific patterns associated with fraudulent claims such as frequency and unusual amounts, spot inconsistencies in claims reports, manipulation in photos submitted with claims and analyse geolocation data to determine whether the reported accident location is consistent with the claimant's driving patterns. 

In addition, AI is being used to speed up claims processing which is reducing waiting times and speeding up the approval of parts needed for repairs as these can be automatically sent to repair centres immediately after a collision. AI can also verify claims forms, match claims with policies and limits and even approve smaller claims following minor accidents without human intervention. Despite the benefits there are also challenges such as the need to adhere to privacy and data protection laws and the ability to handle complex claims. However, the power of AI, when complemented with experienced loss adjusters and claims experts, has the potential to save the insurance industry billions of dollars and free up time for insurance professionals to focus on higher value activities and investigations. 

However, like all technological innovations, AI and connected vehicles bring many risks and makes cars vulnerable to cyberattacks. According to the European Union Agency for Cybersecurity (ENISA), cyber threats to connected vehicles increased by 225% between 2020 and 2024. These threats range from unauthorised remote access to vehicles to AI manipulation that could disrupt automated driving functions. In 2015, two security researchers hijacked a vehicle over the internet. They were able to turn the steering wheel, disable the brakes and shut off the engine. More recently in 2024 security researchers discovered vulnerabilities in Subaru's Starline service that allowed hackers to take control of the vehicles and access sensitive customer data. They could unlock car doors, remotely start and stop the car and track the vehicle's real-time location. Kia also experienced issues that allowed hackers to locate and steal vehicles using just the license plates. Furthermore, earlier this year from January to mid-February, ransomware incidents have impacted vehicles across Europe, the US, Asia and the number of incidents exceeds those in the same period of 2024. 

Many automotive manufacturers are testing and deploying a number of cyber security measures to help prevent attacks, such as AI-driven security tools to detect suspicious activity for example. Jaguar Land Rover has deployed AI anomaly detection to spot cyber threats in connected cars. And one global automaker tested a new AI-based intrusion detection system that successfully detected malicious code that was trying to be injected into the vehicle's infotainment system and was able to isolate the impacted component and neutralise the threat.

In addition, government regulations are also being mandated to ensure stricter protocols such as the UK's 2025 cybersecurity framework for connected vehicles. Furthermore, the AI Act in the EU looks to establish a series of cybersecurity requirements for high-risk AI systems.

The global motor insurance market is both dynamic and rapidly evolving. Recent years have posed significant challenges for motor insurers and reinsurers, as we have navigated heightened inflation, geopolitical uncertainty, extreme weather events, and advancements in safety features and technology. These factors bring short-term challenges but also long-term questions. As we move past these hurdles and look towards 2025 and beyond, the industry will once again face the delicate task of balancing underwriting profits while supporting policyholders. Trade wars and the ongoing technological transformation, including the introduction of autonomous vehicles, will undoubtedly add complexity. However, it also presents unprecedented opportunities to innovate motor insurance.

In this context, reinsurers like Swiss Re will become even more vital partners for motor insurers. Reinsurers provide risk transfer and capital relief to absorb large claims losses especially in catastrophe risks such as motor own damage caused by extreme weather perils and bodily injury. In turn this enables motor insurers to maintain financial stability to cover their regulatory obligations and support ongoing operations. Reinsurers also bring both global and local expertise to your motor portfolio that can help bolster risk assessment with advanced risk modelling tools and inform decisions about pricing, coverage and geographical exposures. Furthermore, in the event of large claims such as bodily injury claims, reinsurance can provide expertise and support to help streamline claims processes and provide benchmarking analysis to see trends in claims severity, identify how they are performing relative to competitors, which can also help to refine underwriting practices. 

The partnership between reinsurers and motor insurers has a long-standing history and has been crucial in navigating market complexities. Through risk transfer and expertise that spans from traditional motor insurance topics to CASE trends, Swiss Re can contribute to a more resilient and sustainable insurance landscape. Not only while drivers are behind the wheel but also in the future, as product liability may gradually replace traditional motor insurance, and drivers will gently move to the passenger seat.

Each market has its own nuances – country spotlights 

In our state of motor reinsurance report we've focused on some of the key trends impacting this line of business. However, each country has its own dynamics and legal regulations. Therefore, in this section we'll take a deep dive into four markets.