Insurance & electric vehicles: special features
Insurance is an essential component in today's choice of vehicle. It defines a contract in which the insurer guarantees to indemnify the insured in the event of the occurrence of a certain risk, in return for payment of a premium. Traditionally, insurance seeks to pool drivers' risks. It adapts its rates and offers to those whose chances of incurring the risk are higher.
When electric vehicles first appeared on the market, insurance companies didn't plan to offer a dedicated insurance package. Why not? Mainly because of the lack of experience with this type of vehicle, and the weakness of the data needed to model a risk for the insurer. As a result, drivers of electric vehicles ended up paying a higher insurance premium, due to the vehicle's higher value than a combustion-powered vehicle.
Is electric vehicle insurance cheaper?
Now that electric vehicles are becoming increasingly popular, insurers are no longer so reluctant to match rates. Now, insurers are keen to attract electric vehicle drivers. In fact, insurance services are offered to electric vehicle owners at a lower price than for internal combustion vehicles, up to 50% cheaper.
In general, the price at which insurance is purchased varies according to many factors which include :
- the driver: criteria such as bonus-malus level, age and length of driving licence.
- the vehicle: the insurer is interested in its power, its residual value and where it is parked (in an urban or rural environment, on a street or boulevard, in a private or public parking lot, etc.).
In a bid to support the goal of carbon-neutral land transport by 2050, insurers are offering lower prices for electric vehicle insurance. The purchase decision depends on all possible costs for the driver, known as the Total Cost of Ownership (TCO). The position of insurers in favor of electric vehicles contributes to the purchasing decision.
The emergence of new insurance models
The introduction of electric vehicles is encouraged by the emergence of new insurance systems. Two models in particular:
- Pay as you drive : un système d’assurance au kilomètre parcouru, peut être très rentable pour les petits rouleurs qui réalisent une distance < 8 000 km/an. Un modèle adapté aux véhicules électriques, car ils sont généralement utilisés dans les territoires urbains.
- Pay how you drive a system that rewards good drivers according to performance and mileage. The price of insurance changes, with reductions of up to of -30%..
As we have seen, insurance plays a role in the adoption of electric vehicles. The electric vehicle meets the challenges of sustainable mobility and extends the services offered by insurers. It's no longer just a question of meeting needs, but of moving closer to the kind of insurance we find in the UK, with a focus on rewards. France wants to become increasingly familiar with this Anglo-Saxon insurance model.
The rise of electric vehicle insurance
Backed by major groups in the insurance, energy and automotive sectors, French company Joltee specializes in 100% electric and plug-in hybrid vehicle insurance. It has created a win-win system for both drivers and the players in its ecosystem. Today's insurers, who offer specialized insurance for electric vehicles in addition to thermal vehicles, are justifying low prices on this insurance, as exposure to risk would be lower due to the still limited battery autonomy, or simply thanks to a commercial gesture applied to attract this type of driver. Joltee sees this as a temporary privilege for electric vehicle drivers, and proposes instead to pay its customers directly for their driving. To do this, it uses blockchain technology, and and generates its own crypto-currency: the Jolt. These Jolts are earned at the end of each trip and can be used to pay for various insurance products, as well as electric mobility solutions from market players such as cars, scooters, bikes and scooters.
The company's approach is designed to encourage electric vehicle drivers to adopt a more eco-responsible and respectful driving style. As electric vehicle drivers are already aware of the importance of eco-responsibility, they can take full advantage of Joltee's reward system. Joltee. They also benefit from the driving flexibility, peace and quiet of an electric vehicle.
A positive influence that electric vehicle drivers benefit from, and which is reflected in their driving analyses. Since most electric cars are new and therefore "connected", the company is in a position to reap the benefits for its customers and its ecosystem.
Joltee aims to combine innovation and ecological transition by helping to reduce Co2 emissions. To achieve this, the start-up is looking to future technologies such as electric vehicles, connected cars and blockchain.
What is blockchain?
Blockchain is a technology that forms part of secure transaction solutions. It is a decentralized network in which the information exchanged cannot be falsified. The interface records all transactions and exchanges carried out between users since its creation. Transactions are carried out in continuous block formhence the name blockchain.
There are several types of blockchain:
- private blockchains: access is restricted to a limited number of users.
- public blockchains: free access for all players, as in the case of bitcoin.
It enables exchanges to be carried out without recourse to a single central control body. Transactions are carried out directly between blockchain participants, using the mining technologies of the peer-to-peer network. of the peer-to-peer network.
What is crypto-currency?
It's a virtual currency, an electronic because it has no physical form. It is exchanged from peer to peer or on exchange platforms, and is based on the blockchainwhich is constantly updated.
A well-driving electric vehicle is a service to both the community and the environment. They therefore benefit from a loyalty program that rewards the choice of electric vehicles. This is paid out in Jolt, the crypto-currency created by Joltee. The company then enables players in the ecosystem to participate in financing these Jolts, enabling them to reduce specific costs and risks, and encouraging contributions from the community.
The company also aims to solve the problems of the cost of acquiring an electric vehicle, the cost of installing a charging station at home, parking and reducing road traffic density by rewarding the sharing of one's vehicle (car-sharing) and charging station. Reduce TCO by monetizing your vehicle or charging station, by offering it for rental to the community..
According to Florent, COO of Joltee, the vision of the future of mobility involves the electrification of fleets.
"We believe that, within the next few years, the proportion of electric vehicles in the French car fleet will increase [...] Drivers will move towards leasing [...] This trend towards more electric vehicles will go hand in hand with a proliferation of mobility solutions enabling people to cover the "last kilometer" cleanly (scooters, bicycles, scooters, etc.). That's why we'll be offering our customers the option of using their rewards to pay for their mobility solutions."
Blockchain for fleet electrification
Including blockchain technology to facilitate the adoption of electric vehicles is a possible avenue. Blockchain can overcome the shortcomings of charging stations and reassure those anxious to travel long distances in an electric vehicle.
The use of a blockchain between charging station owners and electric vehicle owners would facilitate the acquisition of this type of vehicle. This arrangement would make it possible for everyone to pay for and recharge their electric vehicles at the nearest charging station, without constraint. Trust is not required, as the conformity of the transaction and the possibility of exchange are made by blockchain technology.
According to the researchers, from the University of Waterloo, electric vehicle charging infrastructures could be strengthened, if this blockchain was integrated into energy systems.
Indeed, as there is a lack of trust between charging service providers and EV owners. An open blockchain platform could solve this problem. Parties could audit the network and be alerted to any anomalies.
Also, the use of a blockchain for the charging system could provide vehicle-specific data. For example, owners of electric vehicles would have more data on their vehicle, such as information on charging levels or battery life.
What does the future hold for electric vehicle insurance? Expert opinion
As we said earlier, Joltee is a start-up offering insurance services and facilitating the use electric mobility solutions of all kinds: vehicles, bikes, scooters and scooters, all through blockchain technology, by issuing its own crypto-currency (the Jolt) to reward drivers with good driving behavior at the end of each trip.
Why did you choose to specialize in electric vehicles?
First of all, it's important to remember that manufacturers' choices drive markets. The automotive sector has decided to invest heavily in the EV market - VW 33 bn, Daimler 43 bn, Renault-Nissan Alliance 30 bn. Governments have also taken a proactive stance in encouraging EV adoption, notably by introducing incentives for EV purchases, but also by forcing manufacturers to lower their average CO2 emissions via the CAFE standard. What's more, the number of cities that have decided to gradually ban combustion engines continues to grow, starting with the introduction of low-emission zones. This is directly helping to steer the market towards cleaner powertrains such as electric vehicles.
Joltee has logically turned its attention to the EV to contribute to its adoption, and has created an insurance product that is as close as possible to the EV user experience, offering not only the insurance product, but also EV-related services via our growing network of partners.
What are the biggest differences between electric and internal combustion vehicles when it comes to insurance?
The electric vehicle is a recent development, featuring the latest driving assistance and impact detection technologies. Generally more expensive on average than a combustion-powered vehicle, it requires more careful use, and maintenance is less frequent and less costly. These factors have prompted insurers to consider pricing their motor insurance products differently for electric vehicles. Even if solid studies on the impact of the type of motorization on claims experience are rare, the absence of data linked to the recent launch of these vehicles is supporting insurers in this question. Could this be an effect of selecting the best drivers, or simply that these vehicles are safer? The reason is still unclear, and only time will tell.
What is your long-term vision of the future of mobility?
We believe that, within the next few years, the proportion of electric vehicles in the French car fleet will become increasingly significant. The French have become aware of climate change and the urgent need to change their consumption habits, as well as their transport habits.
Acquiring a new vehicle would not be the norm. Drivers would turn to leasing, questioning the usefulness of vehicle ownership. Vehicle owners, for their part, will take advantage of the sharing economy to amortize their acquisition. This trend towards more electric vehicles will go hand in hand with a proliferation of mobility solutions enabling people to cover the "last kilometer" cleanly (scooters, bicycles, scooters, etc.). That's why we'll be offering our customers the possibility of using their rewards to pay for their mobility solutions.
Do you think blockchain can help the adoption of electric vehicles? If so, how?
The monetization of driving data by insurers and the automotive industry is a hot topic right now.
Opportunities to harness data from electric vehicles to improve battery management, report anomalies, propose new charging stations or even reward drivers for their eco-friendly driving, with an insurance product that adapts to their driving, are areas of innovation in the automotive and insurance industries.
This mastery is taking place in a European context of data regulation: LOM, RGPD and other directives to define standards and protect users from non-consensual use of their data. Blockchain takes on its full meaning here for data anonymization through encryption, security, traceability, transparency and interoperability. For us, the primary interest of blockchain in the automotive and insurance industries is to make a sharing network accessible and compatible for several players around the data, while maintaining a high level of security. These two key sectors are poised to rapidly drive the adoption of electric vehicles, where contextualized data is the new gold rush.
What are Joltee's ambitions? Why bet on blockchain?
Joltee is designed to encourage the adoption of electric vehicles, and to bring insurance closer to the way people drive.
Indeed, the growing demand for better air quality, as well as government and European initiatives in favor of more eco-responsible mobility solutions, have led us to promote the energy transition. In addition to a specialized EV insurance product, we offer a range of related services, such as access to public charging stations, green electricity and the installation of home charging stations. In addition, our reward program for drivers of electric vehicles will be a fun way of improving customer driving habits, encouraging good driving behavior and respect for the road, the vehicle and the environment.
This loyalty program consists in financially rewarding good driving behavior. These transactions are managed via the blockchain protocol. In fact, we are exploiting the benefits of this technology, which enables transactions to be recorded in a decentralized, secure and transparent way.
The content of this reward system cannot be falsified, even by the program administrator.
In this respect, we consider that blockchain certifies the incorruptibility of data while preserving the identity of drivers.
Our future ambition is to implement our insurance contracts through the use of blockchain, with the help of an intelligent contract that will, among other things, be able to compensate policyholders automatically. The benefit of this technology will be to ensure the protection of our drivers' identities, while guaranteeing greater fluidity in insurer-policyholder relations.
The data, stored on a platform whose transparency and security are guaranteed, will enable a significant improvement in insurance models, which will be closer to the driver's experience, and more profitable thanks to products that are better adapted to driving.
What is the added value of blockchain for drivers?
Creating a reward system with blockchain guarantees, first and foremost, the reliability of its attribution: this attribution cannot be revoked, since the transaction is recorded in an unalterable register. This technology also ensures the protection of drivers' identities.
Other benefits highlight the transparency, security and flexibility of the jolt reward system. This emphasizes the benefit of blockchain for the trust relationship between companies, insurers and drivers, and therefore the overall loyalty program experience. These analyses are based primarily on several aspects, including the non-expiration of Jolt and their transportability between individuals.
