Insurance coverage adjustment seen as EV ownership increases
As electric vehicles gain momentum, Allianz Insurance Singapore adjusts its insurance products to meet new challenges in risk, pricing, and claims management.
The rise of electric vehicles (EVs) is revolutionizing the automotive industry, and insurance companies like Allianz Insurance Singapore are swiftly adapting to this change, said Jing Yean Wong, Chief Technical Officer of Allianz Insurance Singapore.
According to Wong, the transition to EVs brings unique challenges and necessitates changes across key functional areas of insurance. “We’re adapting our products to cover new risks arising from electric vehicles, such as battery-related issues, increased reliance on software updates, and changing charging behaviors,” he said.
Wong noted that the shift to EVs requires a reevaluation of insurance pricing which includes considering the different driving experience, enhanced safety features, and the higher repair costs associated with EVs.
“The repair of EVs often requires specialized workshops and certified technicians. For instance, traditional towing is replaced by flatbed towing for EVs, and roadside assistance might now include mobile chargers,” Wong explained.
On the regulatory front, Singapore’s approach remains relatively flexible. “While current regulations in Singapore are not overly rigid, we anticipate future regulations to encourage a transition to cleaner energies and set guidelines on battery disposal and power ranges,” Wong predicted.
He added that the Singapore government's ambitious plan to install 60,000 EV charging points by 2030 is set to impact the development of insurance products further.
“As the EV market grows, we foresee a more robust development of insurance products for EV owners. This will clarify coverage terms for battery-related issues and charging incidents,” Wong said.
He mentioned that Allianz Insurance Singapore is not just reacting to current trends but also anticipating future shifts.
“The demand for electric cars is rising, influenced by government climate policies and consumer preferences. This shift presents new risks, affecting everything from manufacturing to motor insurance for EVs,” Wong said.
He introduced Allianz’s EV motor insurance product which covers damages to private charging stations, claims during autonomous driving modes, and losses from cyber hacking.
“It’s a learning journey, and we are developing our offerings as the adoption of EVs becomes more mainstream,” Wong acknowledged.