Gordon Vater, managing director of GB Technical Services, a division of claims and risk management business Gallagher Bassett, highlights the challenges and opportunities for forward looking motor insurers
The automotive industry is experiencing a transformative shift towards electric vehicles (EVs), necessitating significant changes in motor insurance.
As more drivers transition from petrol to electric modes of transport, insurers must evolve their product offerings and approaches when it comes to both underwriting and claims management.
The primary challenge for insurers lies in accurate risk assessment because of the lack of historical data for EV claims – this complicates the establishment of reliable pricing models.
Insurers must invest in research and data analysis to understand EV risk profiles, including accident rates and repair costs.
The rapid advancement of EV technology further complicates matters.
As manufacturers introduce new EV models with unique features and battery technologies, insurers must stay knowledgeable about these developments in order to offer relevant policies.
This requires an agile approach to product development and a readiness to adapt to evolving consumer expectations and technological advancements.
Future focused
Key considerations for new EV insurance policies include addressing battery-related risks, such as fires or malfunctions, and the implications of advanced technologies – like autonomous driving – on liability and coverage.
Additionally, integrating services – such as charging station locators or partnerships with charging networks – can add value and differentiate insurers in a competitive market.
The anticipated surge in EV ownership demands swift adaptation from insurers, including streamlining the policy approval process to ensure a seamless customer experience.
Continual assessment of pricing models is also essential to reflect the lower running costs of EVs, such as reduced maintenance and fuel expenses.
While the road ahead is uncertain, it is also filled with opportunities. Insurers that proactively embrace these changes will thrive in an EV driven future.
