In 2025, the property and casualty insurance subsidiaries of listed insurers continue to advance rapidly in the new energy vehicle insurance business. Concurrently, near-term concerns in this sector have shown signs of alleviation, with leading insurers approaching a critical turning point from underwriting losses towards achieving profitability. However, while immediate worries have eased, long-term challenges are beginning to surface. Breakthroughs in intelligent connected vehicle technology are not only reshaping transportation but also posing disruptive challenges to the traditional auto insurance industry. As the pace of intelligent transformation accelerates, how should new energy vehicle insurance evolve?
**Accelerated Cost Optimization** Data released on March 31 by the Chinese Institute of Actuaries and the China Banking and Insurance Information Technology Management Co., Ltd. showed that in 2025, the insurance industry underwrote 43.58 million new energy vehicles (including 41.81 million passenger vehicles and 1.77 million trucks), an increase of 12.48 million vehicles or 40.1% year-on-year. Premium income reached 190 billion yuan, providing risk coverage of 159 trillion yuan. Underwriting losses amounted to 5.6 billion yuan, a reduction of 100 million yuan compared to the previous year. This indicates that despite the expanding scale of new energy vehicle insurance underwriting and a slight reduction in losses, the sector has yet to achieve profitability on the underwriting side.
How are leading insurers performing in their new energy vehicle insurance business? In recent years, new energy vehicle insurance has been a key topic at the earnings briefings of listed insurers. Zhang Daoming, a member of the Party Committee of PICC Group and Secretary of the Party Committee and Interim Head of PICC Property and Casualty Company, pointed out that overall, new energy vehicle insurance faces three major challenges: first, the claim frequency for new energy vehicles is significantly higher than that for traditional fuel vehicles; second, there is a shortage of social maintenance channels, leading to relatively higher vehicle repair costs; and third, the proportion of personal injury cases and compensation standards are both trending upwards, resulting in an increase in the average claim payout. "These factors collectively keep the claims pressure for new energy vehicle insurance at a high level. However, in the face of these challenges, we are actively leveraging our advantages in data, pricing, channels, and cost control to build a leading position in the new energy vehicle insurance sector," Zhang Daoming stated. He noted that some positive factors are already emerging in new energy vehicle insurance. Influenced by factors such as an increasing proportion of older vehicles, improved driving habits, and advancements in assisted driving technology, the claim frequency for new energy vehicles is showing a downward trend.
In 2025, CPIC Property and Casualty Insurance reported premium income of 25.017 billion yuan from new energy vehicle insurance, accounting for 22.6% of its total auto insurance business, an increase of 5.6 percentage points year-on-year. "It can be said that the growth rate of new energy vehicle insurance has surpassed that of the overall auto insurance business, which benefits from the company's strategic layout in the new energy sector established earlier," said Chen Hui, General Manager of CPIC Property and Casualty Insurance. He explained that through exclusive operations targeting specific automotive brands, technology-enabled claims reduction and loss control, and further enhancements to the service system, the company has achieved significant improvements in the overall business costs of its new energy vehicle insurance operations.
**New Technologies Introduce New Variables** As new energy vehicle technology evolves, new market variables are emerging. The outline of the 15th Five-Year Plan proposes to accelerate the development of strategic emerging industries, including intelligent connected new energy vehicles, and to steadily advance technological innovation in key areas such as intelligent driving. The intelligent connected new energy vehicle industry is gradually entering a new phase of large-scale implementation and commercial operation. This undoubtedly represents a key variable that will impact the entire auto insurance ecosystem. Recently, Beijing announced it would take the lead in initiating the development and application of commercial insurance for intelligent connected new energy vehicles.
Technological transformation is first impacting the core pricing systems of insurance companies. Zhang Xinyuan, head of Kefangde Consulting, stated that traditional auto insurance pricing relies on historical claims data and driver behavior. However, the risk factors for intelligent connected vehicles have fundamentally changed (e.g., reduced human error but heightened risks like system failures and cyber attacks). Insurers need to redesign their pricing models but lack sufficient data support to quantify these new risks effectively. Furthermore, the rapid iteration of intelligent connected vehicle technology and the dynamic nature of risks add to the complexity of pricing.
Inaccurate pricing models are just one side of the challenge; determining liability during the claims settlement process has also become more difficult. Assigning responsibility for accidents involving intelligent connected vehicles involves multiple parties, including the driver, the automaker, software providers, and sensor manufacturers. Current laws and insurance clauses have not yet clearly defined these boundaries. "In the event of an accident under autonomous driving mode, should liability fall on the vehicle owner for improper operation, a system defect, or third-party interference?" Zhang Xinyuan illustrated, noting that the absence of clear liability guidelines could lead to claims disputes and increased costs. Additionally, issues such as the lack of unified technical standards, lagging regulations, and varying levels of consumer acceptance further exacerbate operational uncertainties for insurers.
From Zhang Xinyuan's perspective, to address these challenges, insurance companies need to collaborate with automakers and regulatory authorities to promote data sharing, establish dynamic pricing systems, and explore new insurance products based on actual driving performance.
