Last year, the overall loss for new energy vehicle insurance was 5.6 billion yuan, with PICC, Ping An, and Taiping Insurance leading the way past the profit and loss threshold.

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（Source: Jiemian News）

Against the backdrop of the continued growth in the number of new energy vehicles on the road, the business structure and profitability of the auto insurance market have begun to diverge.

According to data disclosed by the China Association of Actuaries and China Banking and Insurance Information Technology Management Co., Ltd. (China P&C Insurance) on a recent date, in 2025, China’s insurance industry underwrote 43.58 million new energy vehicles, generating premium income of RMB 190 billion; however, the underwriting side still recorded a loss of RMB 5.6 billion. Although the loss narrowed by RMB 0.1 billion year over year and the combined cost ratio decreased by 1.3 percentage points, the industry as a whole has not yet exited the loss-making range.

On one side is rapid scale expansion, and on the other is profitability that has yet to arrive—new energy auto insurance has long been trapped in a structural contradiction of “owners say it’s too expensive, insurers say they’re losing money.” That said, it is worth noting that while the industry as a whole faces pressure, leading property and casualty insurance companies have already crossed the break-even point on underwriting and started to realize underwriting profits.

The industry is still loss-making, but signals of a turning point have emerged

From the perspective of the data structure, the core base of new energy auto insurance is being rapidly enlarged. In 2025, the number of new energy vehicles in operation in China was close to 44 million, accounting for 12% of all vehicles; the share of new registrations during the year was close to half, driving rapid growth in demand for auto insurance.

At the same time, the underwriting scale of the industry expanded in parallel. In 2025, 43.58 million new energy vehicles were underwritten, up 40.1% year over year, providing risk coverage of as much as RMB 159 trillion.

However, scale expansion has not translated into an improvement in profitability. In 2025, the average premium per new energy vehicle was about RMB 4,360, still significantly higher than traditional auto insurance; pressure on the claims side remains prominent, and the industry as a whole posted an underwriting loss of RMB 5.6 billion.

Zhang Daoming, Party Secretary of PICC Property and Casualty, said at China PICC’s 2025 annual performance briefing that, overall, new energy auto insurance faces three major challenges: first, the incident rate for new energy vehicles is higher, far above that of fuel vehicles; second, there is insufficient socialized repair channel capacity, making vehicle repair costs relatively higher; and third, both the proportion of personal injury cases and compensation standards are showing an upward trend, with average claims per case increasing. These factors keep claims pressure for new energy auto insurance at a high level.

But while the industry as a whole has not yet become profitable, leading property and casualty insurers have managed to break through first on the underwriting side by leveraging advantages in data, pricing, and operational capabilities.

In 2025, China PICC underwrote 15.56 million new energy vehicles, up 34.3%; Ping An underwrote 12.84 million, up 44.8%; and China Taiping covers more than 63 million vehicles, up about 37%.

More importantly, profitability has begun to diverge. In its annual report, Ping An disclosed for the first time that its new energy auto insurance business achieved underwriting profits. China Taiping said that household new energy auto insurance has entered a stable profitable range. China PICC also expects that the profitability of the relevant business will continue to improve.

Zhang Daoming noted that, with improvements in driving behavior, advances in assisted driving technology, and optimization of vehicle model structure, the incident rate for new energy vehicles has shown a downward trend. At the same time, safety features such as AEB are substantively reducing claim risks; combined with increasingly strict regulation on the expense side, the industry’s combined cost ratio is expected to continue improving in 2026.

Chen Hui, general manager of China Taiping Property and Casualty, emphasized from the operating side that achieving profitability in new energy auto insurance depends on building both “technology + ecosystem” capabilities. This includes direct-connected after-sales systems with automakers, advancing intelligent damage assessment and data applications, and reducing costs through full lifecycle management, ultimately pushing the business into a stable profitable range.

From “high claims” to “priceable”

If the profitability of leading insurers reflects individual capabilities, then the industry’s move toward profitability relies on the reconstruction of systems and ecosystems.

“The biggest change in new energy auto insurance right now is that risk is becoming ‘explainable.’” Li Ting (a pseudonym), an actuary in a joint-venture property and casualty insurer, told Jiemian News that the core problem in the past was insufficient samples and strong risk heterogeneity, which made it difficult for pricing models to stabilize and converge. But with underwriting scale expanding and telematics data gradually being connected, risk factors are being continuously broken down. “From vehicle models and battery types to driving behavior and usage scenarios, risk granularity has significantly improved, which creates a foundation for differentiated pricing.”

Chen Fang, an actuary in North America, also pointed out to Jiemian News that new energy auto insurance is undergoing a key transition from “experience-based pricing” to “data-based pricing.” “Once accident frequency and average claims per case can be broken down and quantified, insurers can provide more precise rates for different combinations of risks, rather than covering risks by raising prices overall. This will fundamentally ease the structural contradiction of ‘high premiums, high claims.’”

At the system level, regulatory and industry coordination is also accelerating. Li Ting analyzed for Jiemian News that the currently promoted model risk grading system, in essence, brings “vehicle risk” forward to the manufacturing end. Through standardized data feedback mechanisms, it guides automakers to optimize safety and repair economics during the design stage. “This effectively converts some insurance risks into industrial problems to be solved, reducing claim payouts from the source.”

Meanwhile, product forms are also changing. The “vehicle and battery separation” model is viewed by industry insiders as an important breakthrough direction. A person in charge of an insurance technology company said that after separating battery risk from the complete vehicle, it not only can reduce premium volatility, but also can reduce uncertainty around battery-related claims through specialized management.

Looking further into the long term, the popularization of intelligent driving will further change the logic of risk pricing. At the “Major Achievements Special Session” of the 2026 Zhongguancun Forum held at the end of March, Beijing Financial Regulatory Bureau officially announced the launch of commercial insurance development and application for intelligent connected new energy vehicles.

It is understood that this exclusive product optimizes and upgrades the existing foundation of new energy auto insurance. It clarifies concepts, standardizes policy terms, and expands the scope of coverage. In the initial stage, it mainly targets owners of new energy vehicles in Beijing, and it applies to L3 and L4 automated driving vehicles that can be tested in Beijing in accordance with laws and regulations or that have obtained official qualifications to operate on public roads.

A product R&D负责人 of Zhi Che Technology introduced to Jiemian News that with the rollout of L3 pilots, often it is the system driving, and risk naturally shifts from “people” to “systems and algorithms.” For example, issues such as the system making the wrong judgment or the algorithm boundary not covering a certain scenario. Under such circumstances, if you rely only on traditional auto insurance designed around driver responsibility to cover everything, there will certainly be gaps.

He pointed out that as assisted driving becomes widespread, the core of auto insurance pricing shifts from static “people and vehicle” factors to technical dimensions such as sensors, algorithms, and data quality. The scope of underwriting coverage also expands to include technical liabilities brought about by system failures. For claims responsibility assignment, it depends on data traceability—by analyzing the system status and algorithm performance at the time of the accident to determine responsibility.

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