The transformation of the automotive industry is forcing the auto insurance industry to make a change. How can both new and established players break the deadlock?

New energy vehicles are "flying" ahead, while the supporting auto insurance is struggling to catch up.

According to the data from the Passenger Car Market Information Joint Committee of the China Automobile Dealers Association (hereinafter referred to as the "Passenger Car Joint Committee"), in March 2025, 1.237 million new energy vehicles were sold in the Chinese market, a month - on - month increase of 38.7% and a year - on - year increase of 40.2%, with a penetration rate of 42.4%, maintaining a relatively high level.

Meanwhile, the data from the Passenger Car Joint Committee shows that from January to February 2025, the installation rate of L2 - level and above assisted driving functions in new energy passenger vehicles reached 66.3%, and the installation rate of intelligent driving in the market below 160,000 yuan further increased.

According to the statistics from the Ministry of Public Security, as of the end of 2024, the number of new energy vehicles in the country accounted for 8.9% of the total number of vehicles, reaching 31.4 million. This figure was 20.41 million at the end of 2023, with an annual growth rate of over 50%.

Compared with the high penetration rate, high growth rate of new energy vehicles, and the high installation rate of intelligent driving functions in new energy passenger vehicles, the new energy auto insurance market also presents "three highs": high premiums, high accident rates, and high claim settlement rates.

It can be seen that while the new energy vehicle industry in China is developing rapidly, its key supporting service - new energy auto insurance - is clearly lagging behind.

At present, new energy vehicles are facing high risks, high costs, and high losses. Although the risks may only be concentrated in local markets and specific groups in the short term, under the general trend of "vigorously developing intelligent and connected new energy vehicles" in China, the number of new energy vehicles and the installation rate of "intelligent driving" will continue to grow at a high speed. Local risks may also continue to spread and expand to a wider area.

With electrification, networking, intelligence, and sharing, the automotive industry is accelerating in the process of transformation, which will also continuously pose new challenges to the traditional insurance system. So far, only the tip of the iceberg has emerged, but the industry can no longer just "run blindly" and selectively ignore what is "beneath the water". It's time to put the issue of how to break the dilemma of new energy auto insurance on the table as a public topic.

Car owners complain about high prices, while insurance companies cry about losses.

Data can best illustrate the problem.

According to the data disclosed by the China Actuarial Association and the China Banking and Insurance Information Technology Management Co., Ltd., in 2024, the insurance industry in China underwrote 2,795 new energy vehicle models. There were 137 vehicle models with a claim settlement rate of over 100% (without considering the daily operating and management costs of property insurance companies), including 99 buses and 38 trucks; 31.05 million new energy vehicles were underwritten, with a premium income of 140.9 billion yuan, providing a risk protection amount of 106 trillion yuan, and the underwriting loss was 5.7 billion yuan, showing continuous losses.

Zhao Jun, an employee of a leading domestic insurance company, told "50 People in Vehicle - Road - Cloud", currently, the new energy auto insurance business of each insurance company is basically in the red. However, at the same time, new energy vehicle owners also think the insurance prices are too high and some even can't buy insurance. Having been on the front line of the insurance industry for a long time, Zhao Jun is already used to such a phenomenon: "Everyone is dissatisfied."

Driver Li, a ride - hailing driver, has experienced both "high premiums" and "difficulty in insuring". He has been driving a ride - hailing car for five or six years. The new energy vehicle he is currently driving was purchased about three years ago for about 100,000 yuan. As an operating vehicle, the premium in the first year was more than 10,000 yuan. Now, in the fourth year of use and having never had an accident, when renewing the insurance, several insurance companies told him that "your car has a high risk coefficient", either refusing to underwrite or quoting a price of eight or nine thousand yuan.

Driver Li thought it was too expensive. Finally, through an acquaintance, he insured his car with another insurance company for more than 6,000 yuan. He was very satisfied with this price: "It's already quite low. Some of their operating (new energy) vehicles can't even buy commercial insurance and can only buy compulsory traffic insurance."

Searching for "new energy vehicle insurance refusal" on a social media platform, you can see many car owners complaining about the difficulty in insuring and being refused insurance. Some have a long commuting distance and have registered on a carpooling platform; some are private car owners but have bought the "same model" as ride - hailing cars, or have bought a new - force brand rated as high - risk by insurance companies; some said that after having one or two accidents, their premiums doubled in the second year; some said that although they had never had an accident, they were refused insurance because their annual driving mileage exceeded 30,000 kilometers...

However, not every car owner has a feeling of "difficulty in insuring". Driver Xue, a ride - hailing driver who used to be engaged in vehicle maintenance, now leases a new energy vehicle priced within 100,000 yuan to run orders. This car is expected to reach the national mandatory scrapping standard (cumulative driving mileage of 600,000 kilometers) after running for another year, and the premium this year is more than 8,000 yuan. "The premiums are indeed high, but neither I nor people around me have heard of anyone who can't buy insurance," said Driver Xue.

Many private new energy vehicle owners also expressed similar views to Driver Xue to "50 People in Vehicle - Road - Cloud". Xiao Qin, a BYD owner, had seven or eight accidents in one year (half of which were his own responsibility). He said that the vehicle "had almost been repaired or replaced all around except for the battery and the left front door. Minor scratches cost over a thousand yuan, and replacements cost tens of thousands of yuan." However, he didn't encounter any trouble when renewing the insurance, and the premium only increased by a few hundred yuan. The insurance was underwritten by a leading traditional insurance company.

This also shows from one side that around new energy auto insurance, some problems are accumulating, but the risks are currently more concentrated in local markets and specific groups.

But it is a common impression among everyone that the premiums for new energy vehicles are more expensive than those for fuel - powered vehicles.

Although auto insurance is priced according to each vehicle and there are many influencing factors, "50 People in Vehicle - Road - Cloud" learned from many car owners that for economy models targeting mass consumers, the premium difference between family - use fuel - powered vehicles and electric vehicles of the same level is roughly as follows: if the premium for a fuel - powered vehicle is more than 2,000 yuan or 3,000 yuan, the corresponding premium for an electric vehicle is more than 3,000 yuan or 4,000 yuan, with the latter being about 30% - 50% higher than the former.

This statement was also recognized by Zhao Jun, the aforementioned insurance industry insider.

Under the apparent balance, risks are lurking.

New energy vehicles have high premiums, high accident rates, and high claim settlement rates. However, at present, a delicate balance can still be maintained among car owners, insurance companies, and automobile manufacturers.

For car owners, policy incentives and price subsidies have reduced the purchase cost of new energy vehicles, and electrification has significantly reduced the fuel cost of vehicles.

Driver Xue calculated an account for "50 People in Vehicle - Road - Cloud". He drives a ride - hailing car for three or four hundred kilometers a day, and the daily electricity cost is about 40 yuan, which also includes the additional cost caused by the battery attenuation of this old car. For his friend's new car, the daily electricity cost for running a ride - hailing car is only a dozen or twenty yuan. "But if it were a (same - level) fuel - powered vehicle, the daily fuel cost would be at least 200 yuan."

Another private car owner, Xia Xue, commutes about 100 kilometers to and from work every day, and the monthly electricity cost is less than 100 yuan. The fuel cost saved each year is more than enough to cover the annual insurance cost of more than 4,000 yuan.

For insurance companies, it is still a feasible deal to bear certain losses in the new energy auto insurance business in exchange for market share.

Auto insurance is the foundation of the property insurance industry. In Zhao Jun's words, "Auto insurance is the key insurance type for each insurance company to make a living."

The "Suggestions on the Innovation Direction and Development of New Energy Auto Insurance" (hereinafter referred to as the "Development Suggestions") recently released by the China Electric Vehicle 100 - Person Forum mentioned that in recent years, affected by the comprehensive reform of auto insurance and the slowdown in the growth of the number of vehicles, the growth rate of the auto insurance premium scale has slowed down, but it is still the largest insurance type in China's property insurance. In 2024, the auto insurance premium scale in China exceeded 900 billion yuan, accounting for 54% of the total premium income of property insurance companies.

At the same time, the "Development Suggestions" show that the premium of new energy auto insurance in China has rapidly increased from more than 3 billion yuan in 2015 to over 100 billion yuan in 2024, with an average annual compound growth rate of over 50%. It is predicted that by 2030, the premium scale of new energy auto insurance in China will reach about 500 billion yuan, accounting for nearly 50% of the total auto insurance premium. It will become the core growth point in the auto insurance field.

Therefore, considering market cultivation and maintaining market share, even if there are losses, each insurance company still has to operate the new energy auto insurance business. However, at the same time, the losses need to be controlled within a certain range. They cannot blindly expand and "lose more as they do more".

This point is also confirmed by the business data of some leading insurance companies.

According to public data, PICC Property and Casualty Insurance underwrote 11.5905 million new energy vehicles in 2024, a year - on - year increase of 57.3%, with a premium income of 50.857 billion yuan, a year - on - year increase of 58.7%, accounting for 17.2% of the total auto insurance premium; CPIC Property Insurance's new energy auto insurance premium reached 18.317 billion yuan in 2024, accounting for 17% of the total auto insurance premium, with a growth rate of 48.55%; the average annual compound growth rate of new energy auto insurance customers of China Taiping from 2021 to 2024 reached 61%.

The growth rates of the auto insurance business of the three insurance companies are "tacitly" basically "synchronized" with the growth rate of the new energy vehicle market.

For automobile manufacturers, since users will buy cars and insurance companies will provide insurance, the rest is to show their own abilities. The more proactive ones have already entered the insurance industry to layout for the future; the more cautious ones are holding insurance licenses and waiting to see, ready to follow up when the time is right; those with no spare capacity are focusing on the present.

However, under the apparent balance, a crisis is brewing.

As a market - based risk solution different from government relief and social charity, insurance integrates functions such as economic compensation, risk sharing, risk reduction, and social governance. It quantifies risks through actuarial science and provides risk protection for individuals, enterprises, and society in a commercially sustainable way.

However, the new energy auto insurance business in China is losing more as it does more, which is inevitably unsustainable in the long run. If an effective protection system cannot be established for "new - type industrial risks", it will not only have a reverse impact on the industry but may also cause harm to public safety, financial stability, and the social trust system.

The regulatory authorities are closely monitoring relevant issues.

In April 2024, the National Financial Regulatory Administration issued the "Notice on Promoting the High - quality Development of New Energy Auto Insurance (Draft for Comment)" to property insurance companies and other relevant parties, aiming to alleviate the development difficulties of new energy auto insurance through comprehensive measures such as expanding the range of independent pricing coefficients, researching and launching "basic + variable" combined insurance products for ride - hailing cars, and supporting the industry to conduct research on parts - to - whole ratio and safety index.

In September 2024, the "Several Opinions of the State Council on Strengthening Supervision, Preventing Risks, and Promoting the High - quality Development of the Insurance Industry" mentioned that "deepen the comprehensive reform of auto insurance with new energy vehicle commercial insurance as the focus."

In January this year, the Financial Regulatory Administration, the Ministry of Industry and Information Technology, the Ministry of Transport, and the Ministry of Commerce jointly issued the "Guiding Opinions on Deepening Reform, Strengthening Supervision, and Promoting the High - quality Development of New Energy Auto Insurance", launching a series of policy measures, including reasonably reducing the maintenance and use costs of new energy vehicles, establishing a risk - sharing mechanism for high - claim settlements, and enriching commercial auto insurance products. It also proposed to actively adapt to the trend of intelligent driving, pool the strength of the insurance industry, comprehensively and systematically study the medium - and long - term impacts of intelligent driving and rapid model iteration on auto insurance operations, and plan for transformation and development in advance.

How to solve the dilemma of continuous losses?

Why has the new energy auto insurance business been losing money year after year?

In Zhao Jun's view, the biggest and most direct reason at present is that the maintenance cost of new energy vehicles is too high.

Many people think that new energy vehicles "should be cheap". However, in fact, due to various new energy incentive policies in China, the purchase cost of new energy vehicles is relatively low, which makes people ignore some hidden costs. For example, the maintenance or replacement cost of the power battery may exceed the second - hand residual value of the vehicle. Some car owners said bluntly, "Replacing the battery is equivalent to replacing the car."

Chen Hua, an employee of an insurance company affiliated with a domestic automobile manufacturer, told "50 People in Vehicle - Road - Cloud" that the high maintenance cost of new energy vehicles is mainly reflected in four aspects.

First, most cars have avant - garde designs, resulting in high costs for corresponding exterior parts.

Second, with the improvement of vehicle intelligence, some vehicles are equipped with sensors such as lidars at the front and rear. These intelligent devices are very expensive. Once a vehicle collides, it is not just about repairing and replacing structural parts and exterior parts.

Third, more vehicles adopt an integrated design, so local damage requires overall replacement.

Fourth, for new energy vehicles of most brands, there are many models, rapid model updates, and a small number of single - model vehicles in stock, resulting in the lack of large - scale production of spare parts and the insufficient marketization of after - sales maintenance capabilities and resources, thus causing relatively high maintenance costs.

In addition to the maintenance cost, another important factor leading to the loss of the auto insurance business is that the proportion of operating vehicles among new energy vehicles is significantly higher than that of fuel - powered vehicles, resulting in a higher accident rate.

The "Development Suggestions" mentioned that since the fuel cost of new energy vehicles is much lower than that of fuel - powered vehicles, the former are more used in high - frequency operating scenarios such as taxis, ride - hailing cars, and freight. Taking passenger cars as an example, according to the insurance data in 2024, the proportion of new energy vehicles used for operation reached 5.5%, while that of fuel - powered vehicles was only 0.4%.

In addition, there is also a situation where the registered use nature of the vehicle does not match the actual use. Chen Donghui, the former president of Swiss Re China, mentioned in an interview with the "China Banking and Insurance News" in May 2024 that "according to the statistics of the Beijing Insurance Service Center, the actual proportion of new energy vehicles engaged in operation may exceed 50%, but only 20% of the vehicles are registered as commercial vehicles. Insuring commercial vehicles as private cars results in insufficient premium standards."

Behind this risk mismatch phenomenon, there is also a third - party involved - the ride - hailing platform. Driver Li told "50 People in Vehicle - Road - Cloud" that some platforms have lax reviews. When private