Global hybrid and electric vehicle insurance set to surge

Global hybrid and electric vehicle insurance set to surge | Insurance Business Australia

Motor & Fleet

Global hybrid and electric vehicle insurance set to surge

Key trends are outlined

Motor & Fleet

By
Roxanne Libatique

The global market for hybrid and electric vehicle (EV) insurance is expected to grow at a compound annual growth rate (CAGR) of 16.88% by 2030, according to a recent analysis by HTF Market Intelligence.

This growth projection is attributed to the rising adoption of hybrid and EVs, which is driving demand for insurance products specifically tailored to these types of vehicles.

Hybrid and EV insurance refers to specialised coverage that addresses the unique risks associated with these vehicles, such as the high cost of battery replacement, the availability of charging infrastructure, and the potential impact of government incentives.

As hybrid and EV ownership grows, so does the need for insurance policies that cater to these specific needs.

Additionally, the report analysed changing market dynamics, emerging trends, and the key drivers, challenges, and constraints affecting the market.

The report sets out several objectives, including:

analysing and forecasting the market size by value and volume;
estimating the market shares of key segments; and
examining the development of the hybrid and EV insurance market across different regions.

It also aims to provide a detailed assessment of factors influencing market growth and evaluate the business strategies of leading companies in the market, including activities such as research and development, partnerships, and new product launches.

Hybrid and EV insurance market trends

One of the key trends identified in the report is the increasing consumer shift toward environmentally sustainable transportation, which is boosting the demand for specialised insurance products.

The expansion of EV and hybrid markets across various regions presents a significant opportunity for insurers to introduce and expand specialised insurance offerings.

However, the market faces challenges, including the high cost of repairing or replacing essential components like batteries and electric drivetrains. These costs can make it difficult for insurers to manage claims efficiently.

Furthermore, the higher initial premiums associated with EV and hybrid insurance, due to the elevated costs of parts and repairs, may discourage some consumers from opting for these specialised insurance products.