In 2025, premium income reaches 190 billion yuan but still incurs a loss of 5.6 billion yuan, as new energy vehicle insurance faces a loss-making dilemma.

On March 31, 2026, the China Society of Actuaries and China Banking and Insurance Information Technology Management Co., Ltd. jointly released the authoritative operating data for 2025 on new energy vehicle insurance.

The data show that in 2025, China’s insurance industry underwrote 43.58 million new energy vehicles, up 40.1% year over year. Premium income rose to 190 billion yuan, providing risk coverage of as much as 159 trillion yuan. However, the industry as a whole still shows underwriting losses. The loss for the full year was 5.6 billion yuan, compared with a loss of 5.7 billion yuan in 2024, representing a year-over-year decrease of 0.1 billion yuan. The combined ratio fell by 1.3 percentage points year over year.

Industry insiders believe that against the backdrop of the new energy vehicle industry’s continued high-speed penetration and the continuous expansion of the auto insurance market scale, although new energy vehicle insurance businesses have achieved double growth in both underwriting coverage and premium scale, they still have not been able to escape the dilemma of underwriting losses, making it a core operational issue running through the entire property and casualty insurance industry.

Loss situation under high growth

Based on core operating data on the 2025 new energy vehicle insurance market, underwriting volumes surged significantly. The industry underwrote 43.58 million new energy vehicles for the year, including 41.81 million passenger vehicles and 1.77 million freight trucks. Compared with the 31.05 million underwriting volume in 2024, the number increased by 12.48 million within one year, with a growth rate of 40.1%.

In terms of premium income, it grew from 140.9 billion yuan in 2024 to 190 billion yuan in 2025, an increase of about 33.8% year over year. The growth rate far outpaced the traditional fuel vehicle insurance business, and the share of premiums within the overall auto insurance premium pool continued to rise.

As for the loss performance, the underwriting loss of 5.6 billion yuan remains a reality for the industry, but it is already down by 0.1 billion yuan compared with 5.7 billion yuan in 2024. The loss reduction was about 1.75%. At the same time, the combined ratio declined by 1.3 percentage points year over year, reflecting that the insurance industry has improved its cost control, risk selection, and operational refinement in new energy vehicle insurance.

From the underwriting vehicle mix, new energy passenger vehicles remain the absolute market leader, accounting for more than 96%, while freight trucks account for about 4%. However, from the distribution of risk and losses, freight trucks and commercial passenger vehicles have become concentrated high-risk areas.

The data show that in 2025, the industry’s number of new energy vehicle model series reached 429. Among them, there were 143 model series with a claims ratio above 100%, up by 6 from 2024. Of these 143 high-claims-ratio model series, 106 were passenger vehicles and 37 were freight trucks. The share of high-claims-ratio freight-truck model series far exceeds their share in underwriting volume.

Specifically, there were 47 model series with claims ratios between 100% and 110%: 46 passenger-vehicle series and 1 freight-truck series. There were 36 model series with claims ratios between 110% and 120%: 35 passenger-vehicle series and 1 freight-truck series. There were 17 model series with claims ratios between 120% and 130%: 9 passenger-vehicle series and 8 freight-truck series. There were 12 model series with claims ratios between 130% and 140%: 4 passenger-vehicle series and 5 freight-truck series. There were 22 model series with claims ratios above 150%, and only 3 of them were passenger-vehicle series; the remaining 19 were all freight-truck series.

This data clearly indicates that the overall risk level of new energy freight trucks is far higher than that of passenger vehicles, making it one of the important sources of industry underwriting losses.

At the same time, in the passenger-vehicle segment, a large number of vehicles are also used for commercial purposes such as ride-hailing and rides with prearranged routes, making them another severe area for high claims. These vehicles are essentially high-intensity commercial vehicles, but most are insured as if they were passenger vehicles used at home. Premium standards are far lower than for commercial vehicle insurance. Yet their average daily mileage exceeds 200 kilometers, which is five times the 40 kilometers average daily mileage of home-use vehicles. The incident/claims rate reaches three times that of home-use vehicles, directly raising the overall claims level of the corresponding vehicle series.

A manager surnamed Zhang from a leading insurance company told a reporter from the 华夏时报: “Among the 143 high-claims-ratio model series in 2025, vehicles related to commercial use account for more than 30%. They have become a risk pain point that the insurance industry can hardly avoid, so the losses were also within expectations.”

It is worth noting that behind the industry’s overall loss of 5.6 billion yuan, there is also the social responsibility shouldered by the insurance industry. Currently, insurance companies have proactively underwritten large numbers of high-risk commercial freight trucks and ride-hailing vehicles, providing practical coverage for workers in new employment forms such as freight-truck drivers and ride-hailing drivers. They have also provided premium subsidies of several thousand yuan per account for these high-risk vehicles.

A relevant executive from a certain insurance company said to a reporter from the 华夏时报: “We small and mid-sized insurance companies have less business volume, insufficient data reserves, and relatively weaker risk-control capabilities, so the loss magnitude is relatively larger. Although we have not received any notification now, the company has already started to consider strategies to shrink our new energy vehicle insurance business.”

The root causes of losses in new energy vehicle insurance

New energy vehicle insurance has experienced underwriting losses for multiple consecutive years—56.999? (Actually 57 in 2024; 56 in 2025). This situation is not caused by a single factor, but rather the combined result of multiple factors overlapping, including the technological characteristics of new energy vehicles, their usage structures, repair systems, insurance pricing, and industry risk control.

Industry insiders believe that from the standpoint of the industry’s core contradictions, three major problems—high incident/claims rates, high repair costs, and insufficient risk pricing—constitute the core root causes of losses in new energy vehicle insurance.

Zhang Daoming, a member of the CPC committee of PICC and Secretary of the CPC committee of PICC P&C, clearly stated at the company’s 2025 results press conference that the incident/claims rate of new energy vehicles is significantly higher than that of fuel vehicles, which is the primary challenge the industry faces. Industry data show that the overall incident/claims rate for new energy vehicles is about 30%, which is 15% to 70% higher than fuel vehicles, and there are differences among different models.

In response, a staff member responsible for on-site accidents at a certain insurance company told a reporter from the 华夏时报: “The reasons for the relatively high incident/claims rate of new energy vehicles mainly include several factors. First, new energy vehicles have quick start and rapid acceleration. Second, some vehicle owners rely too much on advanced driver-assistance functions, which leads to accidents. Third, there is the mixed insurance issue for commercial vehicles: a large number of ride-hailing and leasing vehicles are insured under the names of home-use vehicles. With high usage intensity, the incident/claims rate naturally stays high, and since the number of such vehicles is huge, you can receive ride-hailing incident/claims orders almost every day.”

It is also worth mentioning that the repair cost after a new energy vehicle incident is higher than that of fuel vehicles, which is a direct reason for the claims ratio being too high. Here, the core is reflected in three areas: the battery, intelligent components, and the vehicle body structure.

Zhang Xiaolei, Executive Vice Chairman and Secretary-General of the China Society of Actuaries, publicly stated that the per-vehicle risk cost of new energy vehicle insurance is 2.2 times that of fuel vehicles, but the premium is only 1.7 times as high. Premium income cannot cover the corresponding risk cost.

Specifically, the battery pack is a core component of new energy vehicles, and its cost accounts for 30% to 50% of the whole vehicle. Moreover, batteries are extremely sensitive to collisions, lifting/towing undercarriage contact, and water submersion. Even minor damage may lead to replacing the entire pack. Battery repair costs account for more than 40% of total losses from accidents.

Second, intelligent components are costly. Intelligent parts such as LiDAR, high-definition cameras, and domain controllers can each cost more than 10,000 yuan. Even minor scrapes can damage the LiDAR.

In addition, the widespread adoption of integrated die-casting technology has greatly increased the difficulty of repairing the body of new energy vehicles. Traditional sheet-metal repair methods are no longer applicable. For localized damage, the entire body assembly often needs replacement, significantly increasing repair costs.

Furthermore, most new energy vehicle manufacturers and battery companies adopt an authorized repair model. Third-party repair institutions find it difficult to obtain authorization for original parts, repair technologies, and equipment. Socialized repair channels are insufficient. As a result, after a vehicle is involved in an incident, most can only return to 4S stores for repair. In 4S stores, parts prices and labor charges are generally higher. Also, some vehicle companies require that core components can only be replaced rather than repaired, further increasing the average claim per case.

Automotive industry analyst Zhai Qiang believes: “Underwriting losses in new energy vehicle insurance are a stage-specific phenomenon in the early phase of industry development. As new energy vehicle technology matures, the socialization of the repair system advances, and insurers accumulate data and improve pricing capabilities, the industry’s combined ratio is expected to continue to improve. But in the short term, under multiple pressures such as high incident/claims rates and high repair costs, the underwriting-loss situation in new energy vehicle insurance will still continue. It will take time for the industry as a whole to turn profitable.”

(Editor: Wen Jing)

Key words:

                                                            New energy vehicles
                                                            Cars