Maximum discount of 8.33% New energy vehicle insurance premiums adjusted incrementally

(Source: Beijing Business Today)

Against the backdrop of the continuous rise in new energy vehicle penetration, the associated new energy vehicle insurance is undergoing a profound transformation in its pricing mechanism. On March 23, Beijing Business Today learned that the autonomous pricing coefficient for new energy vehicle insurance has recently been optimized and adjusted again, expanding from [0.6, 1.4] to [0.55, 1.45]. This is the second expansion since September 2025. Meanwhile, the industry is also exploring reforms in new energy vehicle insurance, from optimizing pricing coefficients to better reflect risk, to exploring the “vehicle-battery separation” model to clarify battery asset risk boundaries, and encouraging automakers to leverage data and technology along the supply chain. This innovation covers cost control, precise insurance pricing, industry regulation improvement, and future development planning, fundamentally reshaping the new energy vehicle insurance ecosystem and promoting a win-win situation for vehicle owners and insurers.

Pricing Range Expansion Again

Beijing Business Today has learned from industry insiders that the autonomous pricing coefficient range for new energy vehicle insurance has recently been adjusted again, expanding from [0.6, 1.4] to [0.55, 1.45], and is now implemented nationwide.

The so-called autonomous pricing coefficient for vehicle insurance is a factor that insurers can adjust within a certain range based on the baseline premium, considering vehicle risk, usage nature, driver behavior, and other factors. The fluctuation range of this coefficient directly determines the insurer’s pricing boundaries. Greater autonomy in setting prices means insurers have more flexibility to adjust premiums, allowing for differentiated pricing based on actual risk levels, which helps insurers better match risk and improve underwriting efficiency, while also enabling high-quality vehicle owners to enjoy more favorable premiums.

For ordinary consumers, the most concern is whether their future insurance premiums will increase or decrease, and how much room there is for adjustment. According to the formula for commercial vehicle insurance premiums: Premium = Base premium × No-Claim Discount (NCD) factor × Autonomous pricing coefficient, the theoretical maximum reduction in premium after adjustment could be 8.33%, calculated as (0.55-0.6)/0.6 = -8.33%. The potential for increase is similar: (1.45-1.4)/1.4 = 3.57%.

However, it’s important to note that this is only a theoretical fluctuation range; actual premium changes are also influenced by other factors. Jiang Han, senior researcher at Pangu Think Tank, stated that lowering the autonomous pricing coefficient means that low-risk, high-quality vehicle owners could receive larger discounts in theory. But the maximum possible discount does not necessarily reflect the actual amount they will receive, as premiums are also affected by traffic violations, vehicle repair ratios, and other factors. The adjustment of the coefficient simply opens the “ceiling” and “floor” for pricing.

Which new energy vehicle owners can reach the new “floor” of prices? Sun Yuhao, senior partner and lawyer at Shanghai Hanhua Yongtai Law Firm, said that typical household owners with good driving habits, zero accident records, and low repair costs will be the first to benefit from lower premiums, as insurers are motivated to attract this high-quality business with lower prices. Conversely, ride-hailing vehicles with longer mileage, higher accident rates, high repair costs, or certain high-end models with disproportionate repair ratios may face premium increases due to their higher risk profiles.

Gradual Reform

In fact, this is the second time the autonomous pricing coefficient for new energy vehicle insurance has been adjusted. The first adjustment occurred in September 2025, when the range expanded from [0.65, 1.35] to [0.6, 1.4].

Compared to the 2023 expansion of traditional fuel vehicle commercial insurance autonomous pricing coefficients from [0.65, 1.35] to [0.5, 1.5], the adjustments for new energy vehicle insurance have been more frequent and with smaller increments, not a one-step change. Sun Yuhao pointed out that this “small steps, quick pace” approach aims to prevent market chaos, such as vicious price wars or sharp premium fluctuations, caused by suddenly opening the pricing range. It also allows insurance companies sufficient time to upgrade actuarial models and accumulate multi-dimensional data on driving behavior and vehicle wear and tear, leading to more stable and precise risk-price matching.

This incremental adjustment approach aligns with regulatory guidance. Early last year, the China Banking and Insurance Regulatory Commission and other four departments issued the “Guiding Opinions on Deepening Reform, Strengthening Regulation, and Promoting High-Quality Development of New Energy Vehicle Insurance” (hereinafter “Guiding Opinions”), which mentioned the need to prudently optimize the autonomous pricing coefficient range, effectively leverage market mechanisms, and promote better risk-price matching in new energy vehicle insurance, thereby enhancing the scientific basis of pricing.

Industry experts believe that the continued expansion of autonomous pricing rights will further motivate insurers to dynamically adjust the average premium per policy based on their risk control capabilities, business structure, and overall cost ratios, potentially improving underwriting profitability. However, this also raises higher requirements for insurers’ pricing and risk management capabilities, pushing them toward more precise pricing and more efficient risk control.

Sun Yuhao emphasized that insurers must abandon coarse pricing models and shift toward refined management. They need to utilize big data, artificial intelligence, and other technologies to accurately identify risk differences across vehicle types, usage patterns, and driving behaviors, and establish corresponding rate systems. Otherwise, they risk losing customers due to overpricing or incurring underwriting losses from underpricing.

Exploring “Vehicle-Battery Separation”

Faced with the long-standing dilemma of “owners complain about high costs, insurers call losses,” the industry has not stopped at rate adjustments but has turned its focus to deeper structural reforms.

By 2026, the industry is accelerating exploration of the “vehicle-battery separation” model in commercial insurance. This approach involves selling, managing, and underwriting the vehicle and the battery as separate assets.

Early policy signals have indicated this direction. The “Guiding Opinions” proposed researching and exploring the “vehicle-battery separation” model for auto insurance products to provide scientific and reasonable insurance coverage for relevant new energy vehicles. In February this year, the Shenzhen Local Financial Supervision Bureau and other four departments jointly issued the “Action Plan for Supporting Technological Innovation and Industrial Development in the Insurance Sector (2026–2028),” which also mentioned exploring the “vehicle-battery separation” model in specific scenarios like urban transportation.

Some regions have already launched pilot projects for “vehicle-battery separation” insurance, with initial results. Beijing Business Today learned that Chongqing Qiantu Logistics replaced the batteries in its first 10 new energy trucks, reducing initial investment costs by 30–50% compared to traditional procurement methods, and insurance premiums also decreased by about 30%.

Why can “vehicle-battery separation” effectively lower premiums and optimize risk? Jiang Han explained that in the traditional model, the battery is one of the most expensive components of the vehicle, and its high risk directly increases the insured amount and premium. Separating the battery reduces the insured amount for the vehicle body only, leading to significant premium reductions—pilot data shows decreases of over 30%. Additionally, this model helps reduce the vehicle’s overall risk exposure. The battery, managed and maintained by professional operators, is less prone to improper charging/discharging and related failures or fires, effectively lowering the risk of accidents from the source.

Sunshine Insurance Shenzhen Branch also publicly emphasized that the “vehicle-battery separation” model is regarded as a key innovative path to systematically address the core issues of “owner value preservation anxiety” and “complexity of insurer claims assessment” in new energy vehicle insurance. It aims to clarify risk subjects and achieve precise asset-risk matching, providing more scientific insurance solutions for the market.

Beijing Business Today Li Xiumei