As the world is gearing up for a shift to allow environment-friendly electric vehicles to replace traditional ICE vehicles, the changing landscape presents both challenges and opportunities for the motor insurance industry.
Higher claim costs due to expensive batteries, in-car technology, and limited repair networks are currently leading to more expensive premiums in EVs. Other challenges that are impacting EV insurance premiums are charging infrastructure, immature supply chains, and global supply-side problems. These issues will subside over time, and the insurance premiums for EVs will resemble more closely to those of traditional ICE vehicles.
On the other hand, government initiatives, legislation, greater battery ranges, falling EV prices, and increasing fuel prices are some of the opportunities that will lead to a rapid proliferation of EVs across the world. Considering the growing demand for EVs, all major insurance providers have already launched their EV-specific insurance products. As a result, the EV insurance market is expected to grow ten-fold from $49 billion in 2020 to $507 billion by 2033.
For more information, download the whitepaper on #Electric Vehicles and the Future of Motor Insurance.