China’s electric vehicle insurance market is facing mounting losses as risk models struggle to keep pace with new vehicle technologies and driver behaviors.

Despite tens of millions of EVs now on Chinese roads, insurers lost 5.7 billion yuan (US$802 million) from underwriting new energy vehicle policies in 2024, according to the China Association of Actuaries.

EV owners in China, often younger and more likely to file claims, pay 20% to 100% higher premiums than drivers of gasoline cars, yet insurers have not turned a profit in this segment for at least three years.

Repair costs for EVs are higher due to complex battery systems and the need for specialized parts.

Some insurers are raising premiums or exiting the EV market, while others are working to better identify higher-risk drivers, such as those using vehicles for ride-hailing.

🔗 Source: Bloomberg