EV Insurance Premiums Surge 33.88% as High Repair Costs and Claim Rates Drive Up Payouts

As of January 31, 2025, data shows that the total premium income from motor insurance across the industry reached RMB 996.37 billion, up 2.99% year-on-year. Among this, premiums from commercial new energy vehicle (NEV) insurance amounted to RMB 157.61 billion, surging by 33.88% year-on-year. Incurred claims payments for NEV insurance totaled RMB 79.92 billion, an increase of 36.09%. New energy vehicle insurance has become the primary driver of growth in the motor insurance sector. In 2024, China sold 16.49 million new energy vehicles, accounting for over 50% of total new vehicle sales. The commercial insurance penetration rate for NEVs is higher than that for conventional fuel-powered vehicles, primarily due to their higher repair costs and stronger demand for risk transfer. The claim frequency for NEVs is 70% higher than that of fuel-powered vehicles, and their loss ratio is approximately 10 percentage points higher. Contributing factors include a higher proportion of younger drivers, frequent accidents during the adaptation period to advanced driver-assistance systems (ADAS), and intensive usage scenarios such as ride-hailing services. Additionally, expensive repairs of core components—such as batteries and LiDAR sensors—and the integrated design of certain models, which often necessitates replacement rather than repair, have further driven up claims costs.