According to the Market Statsville Group (MSG), the global equipment breakdown insurance market size is expected to grow at a CAGR of 11.7% from 2023 to 2033.

The market is being driven due to the increasing reliance on complex machinery and equipment across various industries, including manufacturing, construction, energy, and transportation, has amplified the need for comprehensive coverage against breakdowns. Moreover, the rising frequency of natural disasters and extreme weather events has heightened the risk of equipment damage, necessitating robust insurance solutions. Another factor propelling market growth is the stringent regulations and safety standards imposed by regulatory authorities, which compel businesses to procure equipment breakdown insurance. Compliance with these regulations not only safeguards against potential liabilities but also enhances the overall risk management strategy of organizations.

Furthermore, technological advancements have played a crucial role in the expansion of the market. The emergence of smart equipment and the Internet of Things (IoT) has led to the development of innovative insurance products that utilize real-time monitoring and data analytics to assess equipment performance and predict potential breakdowns, enabling proactive maintenance and minimizing downtime.

Definition of the Global Equipment Breakdown Insurance Market

Equipment breakdown insurance, is a machinery insurance or boiler and machinery insurance, is a type of insurance coverage that protects businesses against financial losses caused by the sudden and accidental breakdown of equipment. It provides coverage for physical damage or mechanical failure of various types of machinery and equipment, such as boilers, electrical systems, air conditioning units, production machinery, and other critical equipment used in industries like manufacturing, construction, transportation, and energy. Equipment breakdown insurance typically covers the costs associated with repairing or replacing damaged equipment, as well as the resulting business interruption losses. It may also provide coverage for additional expenses incurred during the downtime, such as rental equipment, expedited shipping, or temporary repairs..

Global Equipment Breakdown Insurance Market Dynamics

Drivers: Increasing reliance on complex machinery and equipment across industries         

Complex machinery and equipment often involve intricate components and sophisticated technology, making them more vulnerable to breakdowns or mechanical failures. Such incidents can lead to significant financial losses for businesses, including repair or replacement costs, downtime, and potential interruption in production or service delivery. To mitigate these risks, businesses are turning to equipment breakdown insurance to protect their investments and ensure business continuity. Equipment breakdown insurance provides coverage for unforeseen events that can cause damage to machinery, such as electrical or mechanical malfunctions, power surges, operator errors, or even natural disasters. By having the necessary insurance coverage in place, businesses can transfer the financial risk associated with equipment breakdowns to the insurance provider, thereby safeguarding their operations and bottom line.

Furthermore, the increasing complexity of equipment necessitates specialized expertise for repairs and maintenance, which can be costly and time-consuming. Equipment breakdown insurance often includes value-added services, such as access to technical expertise or recommendations for preventive maintenance, which can help businesses optimize the performance and longevity of their machinery..

Restraints: High costs associated with equipment breakdown insurance premiums

The cost of premiums can pose a financial burden for businesses, particularly small and medium-sized enterprises (SMEs) with limited budgets. SMEs may find it challenging to allocate resources for insurance coverage, especially when they are already managing other operational expenses. The high premiums can deter businesses from opting for comprehensive equipment breakdown insurance or cause them to seek lower coverage limits to reduce costs, leaving them potentially exposed to greater risks.

Moreover, businesses may perceive the cost of premiums as disproportionate to the likelihood of equipment breakdowns. They might view the coverage as an additional expense that they may not fully utilize if their equipment remains in good working condition. This perception can lead to hesitancy or reluctance in investing in equipment breakdown insurance.

Opportunity: Growing market for small and medium-sized enterprises seeking comprehensive insurance coverage

As SMEs continue to expand and invest in machinery and equipment to enhance their productivity, they are becoming more conscious of the risks associated with unexpected breakdowns. This awareness is driving SMEs to seek out comprehensive insurance coverage to protect their assets and minimize potential losses. Further, insurance providers are recognizing the market potential and specific needs of SMEs. They are developing specialized insurance products that cater to the unique requirements of SMEs, such as flexible coverage options, competitive premium rates, and value-added services. These tailored offerings make comprehensive equipment breakdown insurance more accessible and appealing to SMEs, opening up new avenues for market growth.

Additionally, advancements in technology and the rise of digital platforms have made it easier for SMEs to access insurance solutions. Online platforms provide convenient avenues for SMEs to research, compare, and purchase equipment breakdown insurance policies. This accessibility is empowering SMEs to proactively protect their assets and operations through comprehensive coverage.

Scope of the Global Equipment Breakdown Insurance Market

The study categorizes the equipment breakdown insurance market-based on product type, service provider and application area at the regional and global levels.

By Product Type Outlook (Sales, USD Million, 2019-2033)

• Mechanical
• Electrical
• Computers & Communications
• Air Conditioners & Refrigeration Systems
• Boilers & Pressure Equipment   

By Service Provider Outlook (Sales, USD Million, 2019-2033)

• Cloud
• Network Service
• Internet Service
• Storage Service
• Telecommunication Service

By Application Outlook (Sales, USD Million, 2019-2033)

• Business
• Manufacturing

By Region Outlook (Sales, USD Million, 2019-2033)

• North America
  • US
  • Canada
  • Mexico
• Europe
  • Germany
  • Italy
  • France
  • UK
  • Spain
  • Poland
  • Russia
  • The Netherlands
  • Norway
  • Czech Republic
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Indonesia
  • Malaysia
  • Thailand
  • Singapore
  • Australia & New Zealand
  • Rest of Asia Pacific
• South America
  • Brazil
  • Argentina
  • Colombia
  • Rest of South America
• The Middle East & Africa
  • Saudi Arabia
  • UAE
  • South Africa
  • Egypt
  • Rest of MEA

Manufacturing segment accounts for the largest market share by Application

Based on application, the market is divided into business and manufacturing. The manufacturing segment accounted for the largest market share in 2023. Manufacturing processes often involve a wide array of specialized machinery and equipment, such as production lines, CNC machines, robotics, and industrial boilers. These assets are critical to maintaining operational efficiency and meeting production targets. Therefore, the manufacturing industry recognizes the importance of protecting these valuable assets against breakdowns, making equipment breakdown insurance a top priority.

Moreover, manufacturing operations are often time-sensitive and rely on a continuous flow of production. Any unexpected equipment failure can lead to costly downtime, production delays, and revenue loss. Equipment breakdown insurance provides a safety net for manufacturers, covering the costs of repairs or replacements, minimizing downtime, and ensuring smooth operations.

Europe accounted for the largest market share by Region

Based on the regions, the global equipment breakdown insurance market has been segmented across Europe, North America, the Middle East & Africa, Asia-Pacific, and South America. Europe accounted for the largest market share in 2023. Europe is home to a wide range of industries, including manufacturing, construction, energy, transportation, and more. These industries heavily rely on complex machinery and equipment to support their operations. As the sophistication and complexity of equipment increase, the risk of breakdowns also rises. This has led businesses in Europe to recognize the importance of equipment breakdown insurance as a means to protect their assets and ensure uninterrupted operations. Also, Europe is known for its stringent regulations and safety standards across industries. Compliance with these regulations often requires businesses to have adequate risk management strategies in place, which includes comprehensive insurance coverage. Equipment breakdown insurance aligns with these regulatory requirements, making it an essential component of risk management for businesses in Europe.

Competitive Landscape: Global Equipment Breakdown Insurance Market

The equipment breakdown insurance market is a significant competitor and extremely cutthroat in the sector is using strategies including product launches, partnerships, acquisitions, agreements, and growth to enhance their market positions. Most sector businesses focus on increasing their operations worldwide and cultivating long-lasting partnerships.

Major key players in the global equipment breakdown insurance market are:

• FM Global 
• Nationwide Mutual Insurance Company 
• Allianz SE Reinsurance 
• Allstate Insurance Company
• CNA
• Axis Capital Pvt Ltd
• Westfield
• Aviva
• Arch Capital Group Ltd
• Liberty Mutual Insuranc
• Erie Insurance
• Central Insurance Company
• Swiss Re
• Patriot Insurance Company

Recent Development

• In February 2023, XL Catlin acquired Guardrisk, a UK-based EBI specialist.
• In March 2023, AXA XL acquired CFC Underwriting, a US-based EBI specialist.
• In March 2023, Zurich Insurance launched a new EBI product that covers businesses in the food and beverage industry.
• In April 2023, AXA XL launched a new EBI product that covers businesses in the manufacturing industry.
• In April 2023 Zurich Insurance acquired Hamilton Insurance, a Bermuda-based EBI specialist.
• In May 2023, Chubb launched a new EBI product that covers businesses in the healthcare industry.

Upcoming Trends in Global Equipment Breakdown Insurance Market

The global equipment breakdown insurance market is poised to witness several upcoming trends that are expected to shape its future trajectory.

• Adoption of Internet of Things (IoT) Technology: The integration of IoT technology is revolutionizing the equipment breakdown insurance market. Connected sensors and devices enable real-time monitoring of equipment health, allowing for proactive maintenance and risk management. Insurers are leveraging IoT data to assess risks accurately, offer personalized coverage, and provide value-added services such as equipment performance optimization.
• Data Analytics and Predictive Modeling: The use of data analytics and predictive modeling is becoming increasingly prevalent in equipment breakdown insurance. Insurers are utilizing advanced analytics techniques to analyze historical data, identify patterns, and predict equipment failures. This enables them to offer more precise risk assessments, customize coverage options, and optimize pricing strategies.
• Expansion of Coverage for Renewable Energy Equipment: With the growing focus on renewable energy sources, there is a rising demand for insurance coverage for renewable energy equipment. Insurers are developing specialized policies that cover breakdowns in solar panels, wind turbines, and other green energy infrastructure. This trend aligns with the global shift towards sustainable energy solutions.
• Cyber Risk Coverage Integration: As technology becomes more integrated into equipment, the risk of cyber threats and attacks increases. Equipment breakdown insurance is evolving to incorporate coverage for cyber risks associated with machinery and equipment. Insurers are addressing potential vulnerabilities, such as data breaches, system malfunctions, and cyberattacks, offering comprehensive protection for businesses.

SWOT Analysis on Global Equipment Breakdown Insurance Market:

Strengths:

• Growing demand for insurance coverage against equipment breakdowns
• Increasing awareness of the importance of business continuity planning
• Rising adoption of new technologies, such as artificial intelligence and machine learning, to improve risk assessment and claims management

Weaknesses:

• High cost of insurance premiums
• Lack of awareness of equipment breakdown insurance among small businesses
• Complex claims process

Opportunities:

• Expansion into new markets, such as emerging economies
• Development of new insurance products, such as parametric insurance
• Partnerships with technology companies to improve risk assessment and claims management

Threats:

• Economic downturn
• Increased competition from new entrants
• Changes in government regulations
• Natural disasters

Analyst Suggestions for Global Equipment Breakdown Insurance Market Stakeholders

Analysts suggest that stakeholders in the global Equipment Breakdown Insurance market should cultivate partnerships with reinsurers in order to limit risk and augment coverage. The adoption of digitalization can be embraced as a means to enhance the efficiency of claims processing and elevate the overall client experience. It is imperative to be up-to-date with technology breakthroughs and market trends in order to effectively adjust policy. Engage in collaborative efforts with underwriters to foster the development of novel and tailored insurance solutions. Furthermore, it is crucial to give precedence to consumer education regarding policy characteristics and actions for risk prevention. Participate in regulatory advocacy to effectively manage the dynamic and ever-changing compliance environments. By adopting these techniques, stakeholders are able to effectively navigate the ever-changing market, take advantage of emerging possibilities, and cultivate long-term resilience within the Equipment Breakdown Insurance industry.

Key Issues Addressed

• What is the market size by various segmentation of the equipment breakdown insurance by region and its respective countries?
• What are the customer buying behavior, key takeaways, and Porter's 5 forces of the equipment breakdown insurance market?
• What are the key opportunities and trends for manufacturers involved in the equipment breakdown insurance supply chain?
• What are the fundamental dynamics (drivers, restraints, opportunities, and challenges) of the market?
• What and how regulations, schemes, patents, and policies are impacting the growth of the market?
• What are the upcoming technological solutions influencing market trends? How will existing companies adapt to the new change in technology?
• The market player positioning, top winning strategies by years, company product developments, and launches will be?
• How has COVID-19 impacted the demand and sales of equipment breakdown insurance in the global market? Also, the expected BPS drop or rise count of the market and market predicted recovery period.
• Detailed analysis of the competitors and their latest launch, and what are the prominent startups introduced in the target market? Also, detailed company profiling of 25+ leading and prominent companies in the market.