Wednesday, July 5, 2023

"Electric vehicle transition to drag up car insurance premiums, warns report"

There is a lot of money to be made going forward but something that seems to trip investors up, or at minimum surprise them, is the importance of understanding the inflationary impacts of just about every aspect of the energy transition.

Folks who have been involved in this stuff since the big Rio confab in 1992 have this fact embedded in their worldview. For people who have lives outside energy and climate science, investment, policy and politics, Barack Obama, when he was still Senator Obama, put it as succinctly as anyone ever has:

“Under my plan … electricity rates would necessarily skyrocket.”
—Presidential candidate, Senator Barack Obama,
Q&A with the editorial board of the San Francisco Chronicle, January 21, 2008

Here's the head of Norway's largest financial services group with the same message:

And the headline story from CityAM, July 5:

The transition to battery electric vehicles (BEVs) will “force a whole-scale adaption of the motor insurance sector” as it struggles to find a solution to the additional costs involved in insuring the new technology, a new report has warned.

BEV claims are already 25.5 per cent more expensive than their combustion engine counterparts and could rise “disproportionately” according to a new report from Thatcham Research – an organisation funded by the sector to investigate motor insurance risks.

As a result, consumers will have to fork out in the form of higher premiums....