As fuel prices rise and the world becomes increasingly conscious of the impacts of climate change, demand for electric vehicles is growing. Insurers can be key in helping their customers navigate the obstacles and opportunities of electric vehicles.
As I shared in my post 5 predictions for the insurance industry in 2022, we expect the global market for electric vehicles to be $725 billion in 2026. This is an emerging growth segment for innovative insurers and not simply a substitution play for declines in existing auto premiums.
The shift for the insurance industry is in reinventing traditional indemnity-based products as innovative offers that help protect the customer’s interests—not just the customer’s assets.
Getting past the barriers of electric vehicles
For many customers, reliable access to a home charging station is a deal-breaker. Homeowners and renters in multi-unit dwellings face many obstacles in getting a space equipped with a charging unit, and regulators are beginning to intervene. Those who rely upon on-street parking near their homes in urban areas are getting creative with charging solutions and likely introducing new risks for the surrounding community in the process.
The opportunity to enable drivers of electric vehicles with charging solutions will be captured by someone. There are many potential business models and many industries that could create relevant offers at an affordable price. Insurers with their wealth of customer data have a clear advantage.
We are already seeing innovations in this area like the Drive Electric program by Bâloise. They were recognized with an Efma-Accenture Innovation in Insurance award. Through their strategic partnerships, they help customers with both setting up home charging stations and with accessing recharging stations across Europe.
Even for customers who have easy access to charging, supply chain disruptions and inflation may still delay the availability and affordability of electric vehicles. For those customers, insurers can be the strategic partner that provides access to the full range of value-added mobility solutions. Those may include vehicle maintenance plans to extend the life of the customer’s current vehicle, options for errand and delivery services, or quick access to mass transit recommendations.
Making data the driver
Many newer vehicles, particularly electric models, are equipped with sensors and IoT capabilities that take them beyond what we think of as equipment and into the realm of technology devices. They are capable of advanced data analytics and can help the insurer and the customer manage risk in real-time.
As insurers consider new vehicle underwriting, they will want to take in-vehicle platforms into account. Whether it’s an automaker or a big tech company that owns the in-vehicle platform, insurers are the natural first choice of partners to include. A smooth car buying and underwriting experience can be the beginning of a long and profitable customer journey.
Insurers with a cloud-enabled technology infrastructure that can accommodate upstream and downstream data flow with ecosystem partners will have the advantage. They will pave the way to bigger underwriting opportunities and more efficient claims decisions down the road.