More than nine out of 10 attendees at ARC360’s specialist EV event, EV-olution, predicted a ‘noticeable’ or ‘significant’ increase in electric vehicle claims in the next two years.
Only eight per cent expected the rise to be minimal.
However, most do not foresee EVs becoming the majority of their claims/work mix for some time yet, with 32% saying it would take another six to nine years and 28% saying nine to 12 years. A further eight per cent did not think it would happen for another 12-15 years with just one per cent expecting EVs to overtake ICE vehicles in under three years.
It is exactly this variable volume and unknowable timeline that has left many businesses in a state of uncertainty – committing to EVs is costly and for many there is no guarantee of a swift return on an investment.
Challenge
For insurers, this poses a significant challenge in terms of both underwriting and repair capacity.
LV= and Direct Line Group have taken slightly different approaches to these challenges, but in each case the focus is on close collaboration with repairers.
Speaking during a session entitled, EVs and the insurer perspective, Chris Payne, Head of Networks & Engineering, LV= Insurance, said, “We’ve been quite aggressive in the electric vehicle market over recent years and have quite a chunk of the marketshare. We have our own EV policy proposition which is going well.
“EV claims volumes are quite low for us, but we need to make sure we’ve got the capability ready for the future. We have about 100 approved repairers nationally and we also have 37 sole sites across our partners. They are not owned by LV=, but they are 100% dedicated to LV=.
“We have minimum standards across all our sites because regardless of volumes, all repairers need to be EV ready. We understand that is a challenge, but we need repairers, they’re fundamental to our business, so we give us much investment support to our repairers as possible to make sure they have the right skills and training and tooling and equipment.
“It is a collaborative approach. We talk to them to understand their challenges and help them overcome them as quickly as we can, and for us it’s a great way to test and learn new and better ways of working.”
Own network
DLG’s model is slightly different. It operates its own bodyshop network and although volumes are still small invests heavily in its repairers to ensure they are EV-ready. This means continuous investment in tooling and training.
Maria Loukadaki, Motor Repair Specialist, Future Technology Specialist, Direct Line Group explained, “We think it is easier to keep EV repairs in our network. We can control the costs and it gives our underwriting team valuable data. We can also control the quality of the job by making sure our people are trained and they are following the methods. It is a big investment to remain fit for the future, but even if you just have one EV on site the process needs to be there.”
However, both Chris and Maria agreed that EVs do present challenges. New models from China are entering the market and not all come with established repair methods – Chris called for greater regulation around this – while their sustainability credentials will remain in question until batteries are more easily repaired or recycled.
Maria said, “Manufacturers want us to replace rather than repair, but how long can we keep throwing good parts away and remain sustainable? They need to consider repairability in design and talk to the industry more. We are not their competitors. We want to insure and repair their vehicles so they need to talk to us more.”
Chris agreed, “The biggest step-change will come when we start repairing batteries instead of writing them off. In 10 years’ time we need to be repairing batteries and battery cells. But we need manufacturer support to get there. The common denominator to all of us is customer retention – manufacturers and insurers both want to retain customers but if cars are not easy to repair we’re going to price that vehicle out of the market. Customers won’t buy them and manufacturers won’t sell them.”
Future
Going forward, more change is coming. It is unlikely that EVs will be the majority powertrain in the UK car parc by 2030 despite government intentions, but they are not the only change impacting the sector.
“The challenge doesn’t stop with EVs, it starts with EVs,” warned Maria. “At DLG, our vision is to make sure the customers remain our focus. We need to make sure we can repair their vehicles no matter what technologies they have in them, and that our products are relevant to them.”
EV-olution was held at the Manufacturing Technology Centre, Coventry with the support of sponsors Thatcham Research and Control€xpert, as well as Corporate Partners and Partners.
ARC360’s specialist EV-olution event was sponsored by Thatcham Research and ControlExpert, along with ARC360 Corporate Partners: BASF, CAPS, Copart, Entegral, Enterprise, Mirka, Nationwide Vehicle Recovery Assistance, S&G Response, and Solera Audatex, and Partners: Gemini Accident Repair Centres, Repairify, and Prasco UK.
