Zurich Hong Kong Predicts 30% growth in Electric Vehicles Penetration by 2026

Accelerated EV penetration in 2023 drives customized insurance solution to bridge insurance gap

• Zurich’s motor insurance segment achieved an impressive 22% year-on-year growth in gross written premium and 23% increase in the number of policies in 2023.
• Amidst robust growth, Zurich observed a significant year-on-year uptake in its Electric Vehicle (EV) penetration. From December 2022 to December 2023, the number of EV insured by Zurich surged by 193%.
• The strong typhoon and ‘Once-in-500-years’ heavy rainstorm that occurred in September last year triggered a total of HKD1.9 billion in insurance claims across the industry, according to Insurance Authority¹. Following these occasions, Zurich’s claims data revealed that the total loss ratio of EVs was 1.6 times higher than that of non-EVs. Zurich regional survey: 86% drivers would prefer an EV-specific insurance protection.
• The substantial increase in EV penetration highlights the demand for Private EV Motor Insurance (“the Plan”)², which is tailored for meeting the unique insurance needs of EV owners and promote sustainability.
  
  

Zurich Insurance (Hong Kong) (“Zurich”), a leading motor insurance provider in Hong Kong, is committed to delivering long-term value to its customers while making a positive contribution to the environment and local communities. With the rapid growth of EVs in Hong Kong, driven by favorable government initiatives and technology advancements, Zurich is delighted to introduce a dedicated EV insurance plan designed to provide essential coverage and support to EV owners.

Remarkable growth in motor insurance business, particularly EV uptake

Hong Kong government has implemented various initiatives to promote the adoption of EVs, including the extension of the first registration tax (FRT) concession arrangement for EVs until March 31, 2026. In addition to that, the government will expand the availability of public EV chargers to further support the transition, with the aim to convert all new private cars in Hong Kong to electric by 2035.

Another key program is the “One for One Replacement Scheme”, which was launched in 2018. Hong Kong has been seeing a significant surge in EV demand since the introduction of the scheme. First EV registrations have skyrocketed from 9% in 2017 to over 60% in 2023, reflecting the accelerating popularity and uptake of EVs³.

The rapid advancement of EV technologies, such as enhanced driver assistance systems, lightweight composite materials, and solid-state batteries, has also contributed to improving the performance, safety, and affordability of EVs, driving increased consumer demand and acceptance of EVs as the sustainable transportation solution.

Amid Hong Kong’s rising EV adoption, Zurich – one of Hong Kong’s leading motor insurers – recorded over 20% growth in gross written premium and number of policies for motor insurance last year. Concurrently, the market share of EV, in terms of the number of policies, has risen 193% in December 2023, compared to that in December 2022.

Last September, Hong Kong experienced a strong typhoon and subsequent 'once-in-500-years' heavy rainstorm that triggered a total of HKD1.9 billion in insurance claims across the industry, as shown by statistics from the Insurance Authority. Zurich's claims data further revealed that the total loss ratio for insured EVs impacted by the storm was 1.6 times that of non-EVs. The generally higher repair costs for EVs underscore the critical importance of comprehensive insurance coverage for EV owners, as the risk of extreme weather events continues to rise. Given the robust growth in EV demand observed in Hong Kong, Zurich anticipates a twofold increase in EV adoption in the Hong Kong market by 2026.

Zurich regional survey: 86% drivers would prefer an EV-specific insurance protection

In addition to the accelerated EV adoption among Zurich's customer base, a recent Zurich APAC survey revealed further insights into the growing demand for EVs and EV-specific insurance products in the region. According to the survey, 62% of respondents indicated that they would consider EVs for their next vehicle purchase, and 86% of drivers expressed a preference for EV-specific insurance policies, even if they cost 20% more. On average, respondents said they are willing to pay 37% more for EV coverage.

Driven by this notable increase in customer demand for EVs and specialized EV insurance products, Zurich forecasts a further 30% growth in the EV proportion within its business over the next two years.

Jim Qin, Chief Executive Officer of General Insurance at Zurich Insurance (Hong Kong), stated: “As the first insurer to pledge the Paris Agreement, Zurich is committed to upholding our dedication to ESG principles and to our customers. Recognizing the pressing demand for EV-specific insurance protection to address the unique risks, Zurich takes pride in our pioneering role in offering a tailored insurance solution for EVs. By identifying and bridging insurance gaps in the market, we offer differentiated services across the entire EV ecosystem. We are dedicated to championing this transition and empowering our customers to join us in embracing sustainable mobility solutions.”

Private EV Motor Insurance offers unique, new-to-market benefits to EV owners

As aforementioned, Zurich is committed to driving the widespread adoption of EVs and supporting Hong Kong's transition towards a greener and more sustainable future. Private EV Motor Insurance is one of the few EV-specific insurance policies that goes beyond traditional motor insurance to address the unique risks and challenges faced by EV owners. Some key benefits⁴ include:

Up to three years new-for-old EV replacement and zero depreciation⁵

• Extend the 0% betterment contribution in repairing for up to three years
• To replace an EV in the event of total loss, customers might need to pay the full first registration tax when there is no one-for-one replacement. In the Zurich new for old EV replacement benefit, customers will not need to worry about the payment and relevant tax as Zurich will replace an EV of the same make and model to the customer within 3 years after the first registration of the EV.

Advanced technology coverage

• We provide protection for damage caused to the insured EV and third-party property when using advanced driving assistance technologies installed by the motor car manufacturer, such as auto-parking. These technologies must be approved by the Transport Department.

Comprehensive charging protection

• Cover for battery damage that may occur during the charging process
• Cover accidental damage of customers' self-owned electric car charger
• Cover any damages caused to the third-party (including charger) while charging
• Increased charger third-party liability: maximum indemnity limit to HKD 20,000,000

Extra peace of mind during car repair

• Temporary substitute vehicle or taxi expense reimbursement benefits
• New option of HKD 1,000 cash benefit if the repair time exceeds two weeks when temporary substitute vehicle or reimbursement of taxi expense are not requested

On the road support

• Provide 24-hour emergency support when customers' EV breaks down on the road, including due to depleted battery
• Offer taxi allowance (up to HKD 200 per assistance case, maximum of one claim per year) when towing service is required due to depleted battery

Go extra miles for sustainability

• Industry-leading benefit: cover the cost of environmentally friendly battery disposal treatment in the case of total loss

For more information, please visit our website.

Alongside Hong Kong Government’s initiatives to promote EV development, Zurich shares the same vision of fostering an eco-friendly culture in Hong Kong and achieving net-zero carbon emissions. The introduction of our tailored EV-specific products, coupled with the company's strategic focus and agility in adapting to the evolving market landscape, will enable Zurich to maintain its leadership position and accelerate the growth of its motor insurance portfolio in the coming years.

¹ Data Source: Extreme weather events demonstrate the social role of insurance in enhancing community resilience, Insurance Authority

² The Plan mentioned in this Press Release refers to Private Motor Car Insurance – Electric Vehicle policy underwritten by Zurich.

³ Data Source: Environment and Ecology Bureau, the Government of the HKSAR

⁴ For details and the definition of terms, please refer to policy wording.

⁵ Only apply to the first and second registration of the car with the Transport Department and that the registration must be made within twelve months from the date of manufacture and insured's estimated value of the electric vehicle must be at least the new replacement value (reasonable market value for brand new same make and model EV) of the motor car at the time of effective date. Please refer to policy wording for details.