Listed insurance companies ramp up their strategies to ease the "immediate concerns" in new energy vehicle insurance

In 2025, listed insurers’ property and casualty insurance subsidiaries are still surging ahead in the new energy vehicle insurance (NEV insurance) market. At the same time, the “near-term worries” for NEV insurance have been somewhat alleviated, and leading insurers are moving into a critical turning point from “underwriting losses” toward “turning the corner to profitability.” However, while the “near-term worries” have eased, the “long-term concerns” are quietly beginning to show. With intelligent connected vehicle technology continuing to break new ground, it is not only reshaping how people travel, but also posing disruptive challenges to the traditional auto insurance industry. As digitalization accelerates across the board, how should NEV insurance develop?

Accelerate Cost Optimization

According to data released on March 31 by the China Chapter of the Society of Actuaries and the China Banking and Insurance Information Technology Management Co., Ltd., in 2025, China’s insurance industry underwrote 43.58 million new energy vehicles (of which 41.81 million were passenger vehicles and 1.77 million were freight trucks), an increase of 12.48 million year over year, representing growth of 40.1%. Premium income totaled 190 billion yuan, providing risk protection of 159 trillion yuan; underwriting losses were 5.6 billion yuan, reducing losses by 0.1 billion yuan year over year.

It can be seen that although the underwriting scale of NEV insurance continues to expand and underwriting losses have declined, underwriting profitability still has not been achieved.

How have leading insurers’ NEV insurance businesses performed? Over the past few years, NEV insurance has remained a keyword at earnings conference calls for listed insurers. Zhang Daoming, a member of the CPC committee of PICC, and Party Secretary and acting responsible person of PICC Property and Casualty, said that, overall, NEV insurance faces three major challenges: first, the claim frequency rate for NEV vehicles is high, significantly higher than that of fuel vehicles; second, there is insufficient socialized maintenance channel capacity, resulting in relatively higher vehicle repair costs; and third, both the proportion of injury-related claims and the compensation standards show an upward trend, with the average claim payment per case increasing.

“Together, these factors keep the compensation pressure for NEV insurance at a high level. However, faced with challenges, we actively leverage our advantages in data, pricing, channels, costs, and so on, and we have already built a leading edge in the NEV insurance field,” Zhang Daoming said. “At present, some positive factors have emerged in NEV insurance. Influenced by multiple factors such as an increase in the share of older vehicles, improvements in driver behavior habits, and progress in advanced driver-assistance technology, the claim frequency rate for NEVs is showing a downward trend.”

In 2025, Taiping Yang Property & Casualty’s premium income from NEV insurance reached 1.59M yuan, accounting for 22.6% of the company’s overall auto insurance business, up 5.6 percentage points year over year. “Should I say, the growth rate of NEV insurance is higher than the overall growth rate of auto insurance business. This is thanks to the company’s overall strategic layout in the NEV space in earlier years,” said Chen Hui, general manager of Taiping Yang Property & Casualty. “The company improves overall business costs for NEV insurance significantly by conducting exclusive operations through automaker brand programs, empowering claims reduction and loss prevention through technology, and further strengthening the service system.”

New Technology Brings New Variables

As new energy vehicle technology evolves, new market variables begin to emerge. The “14th Five-Year Plan and 15th Five-Year Plan Outline” proposes that the development of strategic emerging industries such as intelligent connected new energy vehicles should be accelerated, and key technology innovations such as intelligent driving should be steadily advanced. The intelligent connected new energy vehicle industry has gradually entered a new stage of large-scale implementation and commercialized operation. This is undoubtedly also a key variable affecting the ecosystem of the entire auto insurance industry. Recently, Beijing has announced it will be the first to launch the development and application of commercial insurance for intelligent connected new energy vehicles.

The first thing affected by technological change is the insurance company’s core pricing system. Zhang Xinyuan, head of the consulting firm Ke Fangde, said that traditional auto insurance pricing relies on historical claim data, drivers’ behavior, and the like, but risk factors for intelligent connected vehicles have fundamentally changed (for example, human error is reduced, yet new risks such as system malfunctions and cyberattacks are emerging). Insurers need to redesign pricing models, but lack data support, making it difficult to quantify these new risks. Meanwhile, intelligent connected vehicle technology iterates quickly, and risk changes dynamically, further increasing the difficulty of pricing.

A pricing model being off the mark is only one side of the challenge. The complexity in responsibility determination in the claims handling process also increases. Responsibility allocation for accidents involving intelligent connected vehicles involves multiple parties, including drivers, automakers, software providers, and sensor manufacturers. Current laws and insurance policy clauses have not yet clearly defined this. “In an accident occurring under an intelligent driving mode, should the responsibility be attributed to improper operation by the owner, system defects, or third-party interference?” Zhang Xinyuan gave an example. “At present, there is a lack of a basis for determining liability, which may lead to claim disputes and higher costs. In addition, problems such as non-uniform technical standards, regulatory lag, and differences in consumer acceptance also intensify insurers’ business uncertainty.”

In Zhang Xinyuan’s view, to deal with these challenges, insurance companies need to cooperate with automakers and regulatory authorities to promote data sharing, establish dynamic pricing systems, and explore new insurance products based on actual driving performance.

Li Xiumei, reporter for Beijing Business Daily

(Editor: Qian Xiaorui)

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