EV Manufacturers' Bespoke Insurance Solutions Could Create Shifts in the Auto Insurance Landscape

The race to 100% electric vehicle (EV) transition by 2035 has started in earnest. More than 15 countries, including the United Kingdom, Japan, and Canada, have initiated climate policies mandating 100% zero-emission vehicle (ZEV) new vehicle sales targets for light-duty vehicles by 2035 or earlier.

-- Traditional insurers have had to adapt to high repair costs of EVs and the rapid pace of adoption in China, Europe and U.K. resulting in significant insurance premium rate increases.

-- In an effort to support sales momentum and mitigate insurance concerns some EV manufacturers have come up with bespoke solutions by creating insurance subsidiaries or partnering with a niche insurance firm to provide tailored coverage for their brands.

-- The auto insurance landscape may change in future if the new EV brands are able to gain material market share, and decide to continue creating tailored insurance solutions, to make their cars more appealing to the price conscious mass market.

“Insurers in Europe and the UK have had to adapt to the rapid pace of adoption by proactively reviewing pricing models as more EV claims data are generated,” said Victor Adesanya, Vice President, Insurance. “This has led to significant rate increases partly because of the higher price tag of EVs and partly because they are more costly to repair.”