Up to 8.33% discount, small and quick adjustments to new energy vehicle insurance premiums

As the penetration rate of new energy vehicles continues to rise, the corresponding service of new energy vehicle insurance is undergoing a profound transformation in its pricing mechanism. On March 23, Beijing Business Daily learned that the self-pricing coefficient for new energy vehicle insurance has recently undergone a new round of optimization, expanding from [0.6, 1.4] to [0.55, 1.45]. This is the second expansion since September 2025. Meanwhile, the industry is also continuously exploring reforms in new energy vehicle insurance, from optimizing pricing coefficients to make premiums more aligned with risks, to exploring the “separation of vehicle and battery” model to clarify the risk boundaries of battery assets, and further driving vehicle manufacturers to leverage their data and technology advantages throughout the industry chain. This reform covers the entire chain of repair cost control, precise insurance pricing, improvement of industry regulation, and future development layout, fundamentally reshaping the ecology of new energy vehicle insurance and promoting a win-win situation for both vehicle owners and insurance companies.

Expansion of Pricing Range

Beijing Business Daily has learned from industry insiders that the self-pricing coefficient range for new energy vehicle insurance has recently completed a new round of adjustment, expanding from [0.6, 1.4] to [0.55, 1.45], and it has already been implemented nationwide.

The so-called self-pricing coefficient for vehicle insurance is a range factor that insurance companies adjust based on the benchmark premium, taking into account factors such as vehicle risk, usage nature, and driver behavior. The fluctuation range of the coefficient directly determines the pricing boundary for insurance companies, and obtaining greater self-pricing authority means that insurance companies have more flexible adjustment space when setting premiums, allowing them to price based on the actual risk level of the vehicle. This helps insurance companies more accurately match risks, improve underwriting benefits, and allows quality vehicle owners to enjoy more favorable premiums.

For ordinary consumers, the most pressing concern is whether their future vehicle insurance premium will rise or fall, and how much adjustment space there is. According to the commercial vehicle insurance premium calculation formula: commercial vehicle insurance premium = benchmark premium × no-claims discount coefficient (NCD coefficient) × self-pricing coefficient, theoretically, the adjusted vehicle insurance premium price could decrease by up to 8.33%, that is, (0.55-0.6)/0.6=-8.33%. The increase potential is similarly calculated, (1.45-1.4)/1.4=3.57%.

However, it is important to note that this is only a theoretical fluctuation range, and actual premium changes will also be constrained by other factors. Jiang Han, a senior researcher at Pangu Think Tank, stated that the reduction in the self-pricing coefficient means that the theoretical maximum discount for quality low-risk vehicle owners will be greater. The theoretical maximum decrease does not equal the actual amount of the total decrease because premiums are also constrained by multiple factors such as traffic violation records and vehicle parts ratios. The coefficient adjustment merely opens the “ceiling” and “floor” for pricing adjustments.

Which new energy vehicle owners’ insurance can reach the new price “floor”? Sun Yuhao, a senior partner and lawyer at Shanghai Haihua Yongtai Law Firm, stated that typically, household new energy vehicle owners with good driving habits, zero claims history, and low vehicle parts ratios will be the first to enjoy the price reduction benefits because insurance companies are motivated to attract this quality business through lower prices. Conversely, high-mileage and high-claim-rate operating vehicles, such as ride-hailing cars, as well as high-end models with high maintenance costs or specific models with excessively high parts ratios, may face the possibility of premium increases due to their high-risk characteristics.

Gradual Reform

In fact, this is the second adjustment of the self-pricing coefficient for new energy vehicle insurance. In September 2025, the self-pricing coefficient for new energy vehicle insurance was first adjusted, with the range expanding from [0.65, 1.35] to [0.6, 1.4].

Compared to 2023, when the floating range of self-pricing coefficients for traditional fuel vehicle commercial insurance directly expanded from [0.65, 1.35] to [0.5, 1.5], the adjustments for new energy vehicle insurance self-pricing coefficients have occurred more frequently, with smaller adjustment amplitudes, rather than a direct leap. Sun Yuhao pointed out that this “small steps fast running” approach aims to prevent the market from experiencing vicious price wars or drastic premium fluctuations due to the sudden relaxation of pricing ranges, giving insurance companies ample time to upgrade their actuarial models, accumulate multidimensional driving behavior and vehicle wear data, thus achieving a more stable and accurate matching of risks and prices.

This “small step” adjustment approach also aligns with regulatory guidance. Early last year, the Financial Regulatory Administration and three other departments issued the “Guidance on Deepening Reforms, Strengthening Regulation, and Promoting High-Quality Development of New Energy Vehicle Insurance” (hereinafter referred to as the “Guidance”), which mentioned the need to steadily optimize the floating range of self-pricing coefficients, reasonably optimize the floating range of self-pricing coefficients for new energy commercial vehicle insurance, effectively leverage market mechanisms, and promote better alignment of prices and risks in new energy vehicle insurance, enhancing the scientific nature of pricing for market operators.

Industry insiders believe that the continuous expansion of self-pricing authority will drive insurance companies to further adjust the average premium of new energy commercial insurance dynamically, based on their own risk control capabilities, business structures, and comprehensive cost ratios, and their underwriting profit margins are expected to be further optimized. However, at the same time, this also places higher demands on insurance companies’ pricing capabilities and risk control levels, forcing them to achieve more precise pricing and more efficient risk management.

Sun Yuhao stated that insurance companies must abandon crude pricing models and shift towards refined management. Insurance companies need to leverage big data, artificial intelligence, and other technologies to accurately identify risk differences across different vehicle models, usage types, and even different driving behaviors, and establish a corresponding rate system; otherwise, they will face dual operational risks of client loss due to high pricing or underwriting losses due to low pricing.

Exploring “Separation of Vehicle and Battery”

Faced with the long-standing dual dilemma of “vehicle owners saying it’s expensive, insurance companies saying it’s a loss” in new energy vehicle insurance, the industry has not stopped at rate adjustments but has turned its attention to deeper structural changes.

Entering 2026, the industry is accelerating its exploration of the “separation of vehicle and battery” model for commercial vehicle insurance. The so-called “separation of vehicle and battery” refers to the sale, management, and underwriting of vehicles and power batteries as independent entities.

Signals for exploration have been released in relevant policies. The “Guidance” previously proposed studying and exploring commercial vehicle insurance products with a “separation of vehicle and battery” model to provide scientifically reasonable insurance protection for relevant new energy vehicles. In February of this year, the Shenzhen Municipal Bureau of Financial Management and three other departments jointly issued the “Action Plan for the Insurance Industry to Support Technological Innovation and Industrial Development (2026-2028),” which also pointed out the need to explore commercial vehicle insurance products with a “separation of vehicle and battery” model in specific scenarios like urban transportation.

Currently, some regions have initiated pilot programs for “separation of vehicle and battery” underwriting and have seen initial results. Beijing Business Daily has learned that Chongqing Qianfu Logistics implemented the first batch of 10 new energy trucks, which, compared to traditional procurement methods, reduced initial investment costs by 30%-50%, and insurance premiums were also lowered by about 30%.

Why can “separation of vehicle and battery” effectively reduce premiums and optimize risks? According to Jiang Han, under the traditional model, since the battery is one of the most expensive components of the entire vehicle, its high risk directly raises the insurance amount and premium for the whole vehicle. After separation, the vehicle insurance only covers the part excluding the battery, significantly lowering the insured amount and directly driving down the premium. Pilot data shows that the reduction can exceed 30%. Secondly, this model indeed helps reduce the overall risk exposure of the vehicle itself. The battery is managed and maintained by a professional operator, whose expertise far exceeds that of individual vehicle owners, effectively reducing the risks of battery failures and fire caused by improper charging and discharging, thus lowering the claim rate from the source.

Sunshine Property & Casualty Insurance Shenzhen Branch also publicly emphasized that the “separation of vehicle and battery” model is viewed by the industry as a key innovative path to systematically resolving the core contradiction of “vehicle owners’ value anxiety and complex loss adjustment for insurance companies” in new energy vehicle insurance, aiming to clarify risk subjects and achieve precise matching of assets and risks, providing the market with more scientific insurance solutions.

Beijing Business Daily, Li Xiumei

(Edited by Qian Xiaorui)

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