Sponsored content: James Roberts, head of insurance sales at Europcar, discusses the need for insurers to respond to customer expectations around replacement EVs
The electric vehicle (EV) push can’t be ignored. The government launched a fast-track consultation on Christmas Eve to gather views on how to make the transition to zero emission vehicles a success, but the question remains as to whether the UK insurance industry is going to be able to keep pace.
The big conundrum for insurers stepping into the EV marketplace is how to handle customer expectations when it comes to replacement vehicles.
In 2024, EVs broke the million barrier on UK roads and recent analysis suggests that sales of battery electric vehicles (BEVs) will increase to 440,000 in 2025.
With Consumer Duty now a big focus for insurers, it is critical that the replacement vehicle supply chain is fit for purpose for this growing electric vehicle parc.
However, EV availability for insurers is still hampered by a disconnect with the General Terms of Agreement (GTA), which is a voluntary agreement governing credit hire rates.
Good work is currently being done on the GTA 2.0 to remove frictional costs from the process and smooth relationships. However, a spotlight needs to be put on continuity of service and how the insurance industry will combat EV availability issues.
EV inclusion within the GTA would likely encourage more ‘like-for-like’ replacement vehicles because there will be a heightened confidence amongst credit hire organisations in the recoverability of a claim.
In the meantime, however, tailored solutions are needed right now for the insurance sector to provide replacement vehicle solutions that are fit for purpose.
This is especially important as drivers and businesses increasingly focus on sustainability and zero emissions mobility. Insurers need to be able to respond to these key issues.
Like-for-like
Indeed, recent Europcar research found that nearly 89% of electric vehicle drivers would expect their insurer to provide a like-for-like vehicle while theirs was being repaired. Insurers can’t afford to ignore this expectation.
It could become a critical customer service issue – and certainly not one that insurers will want to have to fix.
Replacement vehicles form a fundamental component of a motor insurance claim and a lack of suitable options can be catastrophic for customer satisfaction. In contrast, if the service goes above and beyond expectations it leaves a lasting positive impression.
Relying on a sole supply partnership – while access to electric vehicles is still not on the scale of internal combustion engine (ICE) models – could therefore bring vulnerability to regulatory scrutiny if a policyholder’s choice is limited.
Many organisations in the replacement vehicle supply chain haven’t yet electrified their network to provide this certainty. Instead, partnering with a rental company with a strong national network and comprehensive fleet of EVs could help ease future supply pressures and targets.
We are working closely with insurance providers, repair networks and other key players to help them deliver continued customer satisfaction and retention as well as continuing to add a substantial number of electric vehicles – cars and vans – to our fleet.
- To find out more about Europcar’s EV solutions for the insurance sector click here
