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

(Source: Beijing Business Daily)

In 2025, listed insurers’ property insurance subsidiaries are still making rapid progress in new energy vehicle insurance business. At the same time, the “near-term worries” in new energy vehicle insurance have somewhat eased, and leading insurers are moving into a crucial turning point from “underwriting losses” toward “the first steps to profitability.” However, while the “near-term worries” have eased, “far-fetched concerns” are quietly emerging. Continued breakthroughs in intelligent connected vehicle technology are not only reshaping transportation and travel, but also posing disruptive challenges to the traditional auto insurance industry. As intelligent transformation accelerates across the board, how should new energy vehicle insurance develop?

Accelerating cost optimization

According to data released on March 31 by the China Association of Actuaries and the China Banking and Insurance Information Technology Management Company, in 2025, China’s insurance industry underwrote 43.58 million new energy vehicles (including 41.81 million passenger vehicles and 1.77 million freight vehicles), an increase of 12.48 million year over year, up 40.1%; premium income was 190 billion yuan, providing risk protection amounting to 159 trillion yuan; the underwriting loss was 5.6 billion yuan, narrowing by 1.0 billion yuan year over year.

It can be seen that although the underwriting scale for new energy vehicle insurance continues to expand and underwriting losses have decreased somewhat, it still has not achieved profitability on the underwriting side.

How have leading insurers’ new energy vehicle insurance businesses performed? Over the past few years, new energy vehicle insurance has always been a key topic at earnings releases by listed insurers. Zhang Daoming, a member of the CPC committee of PICC, the secretary of the CPC committee of PICC Property and Casualty, and acting head, said that, overall, new energy vehicle insurance faces three major challenges: first, new energy vehicles have a higher incident rate, significantly higher than that of fuel vehicles; second, there is an insufficient number of socialized repair channels, making vehicle repair costs relatively high; third, both the proportion of personal injury claims and the compensation standards are showing an upward trend, and average claims paid per case are rising.

“All of this puts the claims pressure for new energy vehicle insurance at a high level. However, in the face of challenges, we actively leverage our advantages in data, pricing, channels, costs, and so on, and have already built a leading edge in the field of new energy vehicle insurance.” Zhang Daoming said that, at present, some positive factors have already appeared in new energy vehicle insurance. Influenced by multiple factors such as an increase in the share of used cars, improvements in driving behavior habits, and advances in assisted driving technology, the incident rate for new energy vehicles is showing a downward trend.

Tianjin Property & Casualty’s new energy vehicle insurance premium income in 2025 reached 25.017 billion yuan, accounting for 22.6% of the company’s total auto insurance business, up 5.6 percentage points year over year. “It should be said that the growth rate of new energy vehicle insurance is higher than that of the overall auto insurance business, which benefits from the company’s earlier overall strategic layout in the new energy sector.” Chen Hui, general manager of PICC Property and Casualty, said that the company improves the overall business cost for new energy vehicle insurance significantly through dedicated operations of car brands, technology-enabled claims cost reduction and loss mitigation, and further strengthening of its service system.

New technologies bring new variables

As technology for new energy vehicles evolves, new market variables are starting to emerge. The “15th Five-Year Plan” outlines that efforts should be made to accelerate the development of strategic emerging industries such as intelligent connected new energy vehicles, and to solidly advance key technology innovations such as intelligent driving. The intelligent connected new energy vehicle industry has gradually entered a new stage of large-scale implementation and commercial operations. There is no doubt that this is also a key variable affecting the overall ecosystem of the auto insurance industry. Recently, Beijing announced that it has taken the lead in launching the development and application of commercial insurance for intelligent connected new energy vehicles.

Technological change first strikes at insurers’ core pricing systems. Zhang Xinyuan, head of the consulting firm Kewangde, said that traditional auto insurance pricing depends on historical incident data and driver behavior, but the risk factors for intelligent connected vehicles have undergone fundamental changes (for example, human error is reduced, but new risks such as system malfunctions and network attacks are becoming more prominent). Insurers need to redesign pricing models, but they lack data support, making it difficult to quantify these new risks. At the same time, intelligent connected vehicle technology iterates quickly, and risks change dynamically, further increasing pricing difficulty.

Inaccuracies in the pricing model are only one side of the challenge; difficulty also increases in determining responsibility in the claims process. In intelligent connected vehicle accidents, assigning responsibility involves multiple parties such as drivers, automakers, software providers, and sensor manufacturers. Existing laws and insurance contract terms have not yet clearly defined this. “In an accident that occurs under intelligent driving mode, should responsibility be attributed to improper operation by the owner, system defects, or interference by a third party?” Zhang Xinyuan gave an example, saying that currently, the lack of grounds for assigning liability may lead to claims disputes and rising costs. In addition, problems such as non-unified technical standards, regulatory lag, and differences in consumer acceptance also heighten operational uncertainty for insurers.

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

By Li Xiumei, reporter from Beijing Business Daily

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