🧠 Food for thought

Implications, context, and why it matters.

Losses come from high repair bills and strict pricing rules

• China’s 2024 combined ratio for new energy vehicle (NEV) policies reached 107%, so insurers spent about 1.07 yuan on claims and expenses for every yuan collected in premiums 1.
• Fixing EVs often costs more. Batteries can make up as much as a third of a car’s value, and average claim costs run 30% to 40% higher than gasoline vehicles 2.
• Pricing cannot fully catch up with those costs. Authorities set base premiums and allow changes only within a limited band 1.
• Rules also limit who insurers can turn away. Regulators said insurers cannot refuse customers or deny compulsory traffic insurance, and authorities launched Easy to Insure to connect EV owners with insurers 1.

Automakers and insurtechs are stepping into EV insurance

• Weak profits for traditional insurers have opened the door for new entrants. Xiaomi Corp., BNP Paribas SA, and Volkswagen AG formed a new property and casualty insurer, Tesla registered an insurance brokerage, and BYD runs its own insurance company in China 1.
• Many want to use vehicle and driver data to price risk. AM Best (an insurance-industry credit-rating firm) said NEV automakers often enter by buying domestic insurance brokers, and one has set up an insurance company 3.
• Partnerships are also growing. Cheche Group said it is deepening its work with NIO to improve insurance services across NIO’s multi-brand portfolio 4.
• Expansion plans reach beyond China. Cheche said it plans to enter international markets in Q4 2025, with a roadmap for Asia-Pacific, Europe, and Latin America 5.