China’s EV insurers move towards profitability on higher premiums, AI adoption

Chinese insurers underwriting electric vehicle (EV) policies have a better chance of turning a profit this year, supported by higher premiums, intelligent pricing mechanisms and improved claims-handling efficiency.A turnaround in mainland China’s EV insurance market, against the backdrop of a bearish outlook for the automotive sector, will accelerate the pace of electrification on the country’s roads, according to industry officials and analysts.“Heavy losses in the insurance business used to be a big hurdle for the EV industry’s fast-track growth,” said Wang Feng, chairman of Shanghai-based financial services group Ye Lang Capital. “As the major insurance players make profits from underwriting policies, EV owners will also benefit from lower premiums.”Mainland insurers posted a combined loss of 5.7 billion yuan (US$825 million) from underwriting EV policies in 2024, according to the latest available data from the China Association of Actuaries (CAA).The average EV insurance premium in China was 4,487 yuan a year, according to data compiled by insurance broker Aon. Photo: AFPInsurance firms generated more than 200 billion yuan in premiums from EV policies last year, an increase of 30 per cent from 2024, state news agency Xinhua reported in January, citing data from the National Financial Regulatory Administration (NFRA).