Motor insurers' investment shift to electric power

Home > Industry Analysis > Content

【Summary】The ownership of electric and hybrid vehicles is increasing in the UK, posing challenges for insurers. The rise in electric vehicle adoption has led to a need for infrastructure development, including charging points. Data shows a significant increase in the number of charge points in the UK. Private ownership of hybrid electric vehicles has risen by 83% and ownership of fully electric vehicles has risen by 178%.

FutureCar Staff Sep 13, 2023 6:15 AM PT

Motor insurers' investment shift to electric power

New research indicates that the ownership of electric and hybrid vehicles in the UK has been rapidly increasing, presenting new challenges for insurers. The UK's goal to end the sale of internal combustion engine (ICE) vehicles by 2030 has gained momentum, and A-plan insurance has compiled data that highlights the speed of this transformation. However, there have been obstacles to overcome, such as the need for infrastructure to keep up with the growing number of electric vehicles on the road.

One of the concerns has been the availability of charging points and the limited range of a single charge. Nevertheless, significant investments have been made in infrastructure over the past year to address these issues and ensure the smooth operation of electric vehicles. A-plan's data reveals that as of July 2023, the UK has reached a total of 45,737 charge points, marking a 40% increase from the previous year. The majority of these charge points, 32%, are located in the greater London area, while Scotland, Wales, and Northern Ireland have smaller percentages.

The data also shows a substantial increase in private ownership of hybrid electric vehicles, with an 83% rise across the UK. Ownership of fully electric vehicles has seen an even more significant increase of 178%. In contrast, ownership of internal combustion engine vehicles has declined over the past three years, with diesel car ownership shrinking by 3% during this period.

Insurers now face the challenge of keeping up with the changing technology and the rising number of electric vehicles on the road. One issue they encounter is the lack of accident centers equipped with the necessary expertise in electric and hybrid vehicle repair capabilities. This often leads insurers to make the decision to write off a vehicle that could potentially be repaired. Additionally, access to replacement parts is limited, and the repair sector seems to be lagging behind as motor manufacturers develop new technologies and systems to support autonomous travel.

The question arises as to whether insurers are nearing a tipping point where they shift their focus and investment away from ICE-powered vehicles and towards electric and hybrid systems. This tipping point may depend on how frequently insurers are willing to write off vehicles simply because they cannot be repaired due to technological limitations.