Drivers’ gradual transition to EVs poses several challenges for the insurance industry, meaning that the entire sector is assessing the sustainability of their claims solutions and motor products for the EV driver demographic.
In this blog, we discuss the ways in which insurance brokers can adapt their solutions and products to meet the needs of EV drivers.
Differentiating your insurance products for EV drivers
On the surface, it might seem that mass EV adoption will be gradual and is ‘nothing to worry about’ now. However, in March, BEV vehicle sales represented a mammoth 7.5% of all new vehicles sold in the UK! The numbers continue to grow, especially in the company car sector, both through company schemes and via personal car allowances, where tax breaks are still attractive.
The move to EV may well cause a major shift in consumer attitudes, wants, and needs. From the data collected so far, we are seeing a higher demand for like for like vehicle replacement. The definition of ‘like for like’ seems to be changing though, as the main focus for an EV driver is that the replacement vehicle is similar in size, but more importantly similar in ‘range’ and ‘charging speed’.
We are also finding that EV drivers are refusing non-EV courtesy cars due to their ethical commitment to low emissions, but also the unnecessary and additional cost of petrol and diesel. We have seen an increase in underwriter requests for EV mobility rates, enabling the development and launch of new BEV replacement vehicle policies, which are experiencing high take up in a growing market base.
There is also the requirement to ensure your incumbent claims management or FNOL partner has the necessary non-fault BEV capabilities and partnerships in place.
Working with an FNOL provider who is BEV ready may become an important way to safeguard your claims revenue and customer retention. This is again due to the higher expectations and demands of an EV driver, who, from recent experience, will not accept an ICE replacement vehicle when their EV is in for repair. From EV driver feedback, we have learned that:
- They prefer the features of an EV to an ICE vehicle.
- They purchased their EV because of their ethical commitment to reduce carbon emissions.
- They have established their daily routine around EV use and charging, and would be inconvenienced to change from an overnight charging cycle to buying fuel.
- They are concerned about the extra spend on fuel an ICE would require, and may dispute who should pay for this.
Being able to offer replacement EVs is therefore an important way for brokers to get ahead of the competition and demonstrate to customers that they understand the lifestyle implications of their choice and can support them when they need help.
Making specialist EV services part of your value proposition
As well as safeguarding your customer retention and claims revenue, adapting your strategy to incorporate EV will also present an opportunity to promote specialist EV services.
By making specialist EV part of your value proposition, you can raise awareness of your own business’s contribution to low emissions as well as providing an insurance solution specifically for the growing EV demographic.
Partner with AX
As a result of the dramatic increase in EV sales last year, AX has made and continues to make significant investments into our fleet and charging infrastructure. We have unrivalled insights that can help you understand the difference in expectations and demands of EV customers and for your own business and risk profile.
By partnering with AX, we will help make your transition to BEV more seamless by supporting you in developing a claims and product solution to deal with both BEV and ICE customers through this 10-year transition period. We will always communicate clearly and effectively with your customers and ensure the best commercial return.
Get in touch with us today to find out more.
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