The electric vehicle (EV) insurance sector in Thailand is currently navigating a period of transition due to emerging challenges within the industry. Insurance companies, car manufacturers, and financial institutions are reassessing their strategies following unverified reports that some insurers have ceased providing coverage for EVs. In response, Tokio Marine Insurance Co., Ltd. has updated its premium calculation methods to more accurately reflect the fluctuating market values of EVs, aiming to ensure equitable premiums for their customers.
The profitability of EV insurance has been impacted by elevated claim rates and the higher costs associated with EV repairs compared to traditional vehicles. Lars Heibutzki, president of Allianz Ayudhya General Insurance, noted the significant risks posed by expensive EV batteries and their potential fire hazards. However, he also pointed out that the decreasing cost of batteries is contributing to a reduction in overall EV prices, which could invigorate the market.
Despite these challenges, the Thai EV market is expected to grow further, driven by increased environmental awareness and advancements in technology that improve battery life and efficiency. Nevertheless, experts said the complexity of the insurance landscape and tighter auto loan requirements amid the economic uncertainties may lead to a temporary decline in EV sales, as consumers wait for further price reductions. (NNT)
