Electric Vehicle Insurance Market Faces Profitability Challenges Amid Rapid Growth

The global electric vehicle (EV) insurance market is set to quadruple by 2030, driven by soaring EV sales. However, insurers face challenges in maintaining profitability due to higher accident rates and steeper repair costs for EVs. A Swiss Re Institute report highlights that EVs have nearly double the accident frequency of traditional vehicles, partly due to commercial use. Repair costs are 26.6% higher in the U.S., and similar trends are seen in Europe.

Automakers are addressing these challenges by acquiring insurance licenses and partnering with insurers to offer coverage. Deeper cooperation between the auto and insurance industries could lead to customized EV insurance products that better serve consumers.