Written evidence from the Admiral Group (ELV0114) 

15th September 2023

Admiral Group response to House of Lords call for evidence on Electric Vehicles

Admiral Group plc is an FTSE100 global financial services company offering motor, household, travel, and pet insurance as well as personal lending products. As of 30th June 2023, Admiral Group insured over 9 million customers, with 7 million insurance customers in the UK.

Our UK business provides cover for 4.76 million vehicles making it one of the country’s leading motor insurers.

Established in 1993 in the UK, the Group is headquartered in Cardiff, South Wales and now has offices in Canada, France, Gibraltar, India, Italy, Spain, and the U.S. Admiral Group employs over 11,000 people and is recognised as a Great Place to Work in all of its markets.

Our purpose is to help more people to look after their future and we deliver this by providing customers with financial services products that give them peace of mind that we will be there for them should the worst happen and by providing our colleagues with fulfilling career opportunities and giving them shares in our business so they can financially benefit from their hard work. 

Executive summary

  1. In line with our purpose to help more people to look after their future, Admiral is supportive of the Government’s 2030 and 2035 goals which have galvanised progress within the electric vehicle (EV) ecosystem.
     
  2. We are supportive of the ABI’s response on behalf of the industry to this inquiry and, as one of the UK’s leading motor insurers, we believe we can play a key role in supporting customers’ transition from internal combustion engine vehicles to electric alternatives. We provide cover for electric vehicles and our ambition is to be the market leader here.
     
  3. However, we believe that there are significant steps that need to be taken in order for the Government’s targets to be achieved including ensuring that we have the skilled labour required to maintain and recycle the increasing volume of electric vehicles and their components.

 

Question 1: What are the main obstacles to the achievement of the Government’s 2030 and 2035 phase-out dates? Are the phase-out dates realistic and achievable? If not, what steps should the Government take to make the phase-out dates achievable?

  1. We are supportive of the phase-out dates as these public commitments have meant that original equipment manufacturers (OEMs) are dedicating resource and changing UK strategies to meet these targets. Whilst we believe these phase-out dates are realistic and achievable, we believe that more incentives will need to be made to help with the cost of owning an EV.
     
  2. As part of our research and development process we regularly engage with our customers and with focus groups of drivers in the UK to understand some of the hesitation people may have about transitioning from internal combustion engine (ICE) vehicles to electric alternatives and we have found that negative perceptions about the cost of electric vehicles, the ease of charging them, the safety of electric vehicles, including the distance someone can travel on a single charge are acting as barriers to the transition.
     
  3. We have created insurance products which we believe help to address some of drivers’ key concerns. However, a Government-led campaign reassuring people about the benefits of owning an EV and, the incentives available for switching to a greener alternative and how, for example, they are working to ensure charging and battery recycling can easily be done in the UK would influence consumer behaviour and potentially supercharge the transition to EVs.

 

Question 17: Are consumers charged higher rates of insurance for an EV when compared to an internal combustion engine (ICE) vehicle, and if so, are these higher rates justified? Can the Government do anything to mitigate this?
 

  1. No. When we calculate a driver’s premium, we take into account the make and value of a car and the electric vehicles currently on the road tend to be more prestigious vehicles and to have a higher spec for make and models than the ICEs that people drive. In a similar vein, they typically incorporate new technologies such as connected capabilities that isn’t present in the average ICE vehicles.
     
  2. When we calculate premiums, we consider our claims experience including the cost of repairing particular vehicles. We are concerned that a lack of skilled repairers could significantly increase the cost of repairing EVs which would make them more expensive to insure. With the Government driving an increase in EVs onto the road, we would be supportive of Government initiatives to upskill existing repairers and encourage more people to choose vehicle repair and maintenance as a career to reduce delays and costs to motorists who choose a greener vehicle.

 

Question 18: What are the main challenges that UK consumers face in their use of EVs?

  1. As mentioned, one of the key concerns for drivers who have an EV and those who are considering transitioning to an EV it is the confidence around the charging network. 
     
  2. As one of the UK’s largest motor insurers we believe we can play a key role in supporting the transition to EV and have launched insurers products that seek to address some of the concerns that motorists have.
     
  3. To reduce concerns around a lack of charge disrupting a customer’s journey, our comprehensive EV policy offers free recovery as standard. This means that, if a customer runs out of electrical charge, we will collect them and take them either to a charging point, their home, or a destination of their choosing.
     
  4. We also provide cover for drivers’ charging cables if they are lost or stolen as a result of an accident or fire or theft claim. We would also cover cables from a liability point of view, so if someone trips over a cable whilst it is in use. In addition, with Admiral car batteries are covered for accidental damage, fire or theft and, our home insurance policy, provides cover for the damage of a wall box under fixtures and fittings.
     
  5. We are continuing to enhance our offering for EVs to give customers peace of mind that they will be protected if the worst were to happen with their vehicle.