The Necessity and Feasibility of Usage-Based Insurance for New Energy Vehicles in China

Aims: With the continuous development and growth of China's new energy automobile market, new automobile owners desire exclusive auto insurance. However, most insurance companies use traditional automobile commercial auto insurance to cover them. Under this pricing model, there is little overall difference in premiums, regardless of whether the driver's driving behavior is good or not. This paper wants to implement usage-based insurance (UBI) in China because it can add more auxiliary pricing factors, adjust according to the driver's driving behavior changes, and make auto insurance pricing more scientific and fair.

Study Design: This paper employs the literature review and market research methods to analyze the current product supply and consumer demand in the Chinese auto insurance market. Firstly, introduce the current situation of the development of the new energy automobile insurance market in China and its problems. Then, discuss the necessity and feasibility of developing UBI auto insurance for new energy vehicles in China. Finally, based on the reality of China's new energy vehicle UBI auto insurance gives some programs.

Conclusion: This paper finds that from the perspective of insurance companies, consumers, and the social level, UBI auto insurance for new energy automobiles is necessary, and it is also the direction of future auto insurance reform and development. Subsequently, combined with China's current relevant policies and technologies, it is concluded that the development of UBI auto insurance for new energy vehicles in China is feasible.