Executives advise caution for EV insurers

Several firms poised to raise premiums

- NUNTAWUN POLKUAMDEE

Thailand's non-life insurance sector is on high alert as reports circulate that a Chinese electric vehicle (EV) manufacturer active in the Thai market may face bankruptcy, hinting that EV insurance is already a loss-making business.

The news raised concerns over mounting liabilities for local insurers, particularly regarding repair claims for unavailable parts, according to insurance executives.

A news report alleged the Chinese parent firm of Neta Auto Thailand is facing an inquiry into its debt repayment capability.

Several Thai insurers already raised premiums for EV policies to reflect rising risks. For instance, annual premiums previously priced around 20,000 baht are now climbing to 25,000-28,000 baht per vehicle, especially for brands with limited service infrastructures and unreliable supply chains, said the executives.

They said most insurers still accept policies for new EVs from the troubled brand. However, renewed contracts may have significantly higher premiums due to increased risks, such as scarcity of spare parts and the potential insolvency of the automaker.

Some insurers are even suspending coverage for specific EV brands or models, citing complex logistics, limited availability of trained technicians and higher repair costs using brand-exclusive service centres.

Moreover, frequent price cuts by EV makers, particularly from China, are complicating insurers' ability to set accurate premiums. These sudden devaluations have created situations where insured values exceed current market prices.

Apisit Anantanatarat, chief executive of Bangkok Insurance (BKI), said the company is taking a cautious stance on EVs due to high loss ratios. In 2024, BKI's EV insurance segment recorded an average claims ratio of 67-68%, with some brands nearing 100%.