According to the report “Economic understanding” published it The Swiss Re Instituteglobal market of electric vehicle (EV) they are growing rapidly and raising new risks for auto insurers.
The increasing number of electric cars on the road will lead to the development of EV car insurance. Estimates put the global market size at more than $200 billion by 2030, from $51 billion in 2022.
Electric vehicle driving habits, maintenance costs and risks affect the profitability of the subscription business and may require closer cooperation between drivers and insurers, the report’s authors said.
Almost 14 million electric vehicles are sold worldwide in 2023, increasing 35% annually and accounting for 18% of all vehicle sales. The International Energy Agency (IEA) predicts that sales of electric cars will grow at an average of 30% per year until 2030, and that by 2035 electric cars will make up about half of the new cars in -sold worldwide, selling 73 million items in 2040. .
The use of electric vehicles creates new driving habits that, along with the repair of automobiles, represent a new type of risk for insurers.
Electric vehicles accelerate much faster from a standstill compared to internal combustion engine (ICE) vehicles, which can increase the risk of accidents and collisions.
In China, an insurance agent said that the accident rate of electric cars is almost twice that of ICE cars, which is often said to be commercial electric cars. Electric vehicle risks focus on the installation and operation of charging equipment and batteries. Combined fire and explosion risks increase property and liability insurance coverage.
Maintenance costs for electric vehicles are generally higher than for ICE vehicles. A study conducted in 2022 US found that the average price increase is 26.6%. This is proven by research conducted in Germany, which showed a 30%-35% higher price.
There are many reasons for this: the main engine and battery systems are in the front of the car; Electric vehicles have digital devices or laser / radar that create high costs for repairs. Typically, electric vehicles require more labor time for inspection and maintenance due to the heavy use of embedded software and driver assistance systems. In addition, many electric cars are tightly coupled, making them difficult to repair.
To facilitate sales, electric vehicle manufacturers obtain their own insurance policies and some have begun to partner with insurance companies to be able to provide direct risk coverage. However, deeper cooperation between insurers and EV manufacturers can help overcome the underwriting challenge in the short term. Electric car manufacturers know the risk characteristics of their vehicles and collect driving data, experienced insurers say. The joint innovation can support electric vehicle insurance that complements driving behavior or offers personalized solutions and other services to insurance, for example in repairs and maintenance.