New Economic Insurance Opportunities: Battery Capacity Coverage for Electric Vehicles and Exploration of Low-altitude Economy Insurance

Insurance Innovations in the New Economy: Battery Capacity Coverage for New Energy Vehicles and Exploration of Low-Altitude Economic Insurance

Financial support is essential for industrial upgrades. Recently, reporters from Beike Financial visited CATL and Chengdu Zhongheng Dapeng Drone Technology Co., Ltd. (hereafter referred to as Zhongheng Dapeng) to learn that insurance products have entered sectors like new energy vehicles and the low-altitude economy, providing coverage for critical areas.

Battery Degradation Assurance

The battery is a core component of new energy vehicles, accounting for approximately 40% of the vehicle’s cost. For vehicle owners, battery degradation is a significant concern. A report released in November 2024 by the China Automotive Technology and Research Center showed varying states of battery health across different new energy vehicles. For instance, after driving 103,000 kilometers, the battery health of the 2020 Li Auto ONE was only 75.6%. However, the 2021 China Insurance Industry Association report on the Special Terms for Commercial Insurance of New Energy Vehicles (Trial) indicated that battery degradation was not covered under new energy vehicle insurance.

To provide consumers with more options, the Chengdu branch of PICC Property and Casualty Insurance collaborated with CATL to develop a solution for the issue of battery capacity degradation over six months. In late 2024, PICC launched the first insurance policy for battery capacity coverage in Chengdu. Within the agreed insurance period (1-3 years) and mileage, if the battery reaches a specified degradation rate, consumers can opt for repair or replacement. This initiative significantly enhances consumer confidence in new energy vehicles.

Multiple Insurers Enter the Low-Altitude Economy

Apart from new energy vehicles, the low-altitude economy has gained popularity in recent years. According to predictions from the China Civil Aviation Administration, the market size of the low-altitude economy is expected to reach 1.5 trillion yuan by 2025, potentially increasing to 3.5 trillion yuan by 2035. Beike Financial’s investigations revealed that insurance demand in the low-altitude economy spans various aspects. For example, drone companies require insurance coverage to share the risks during research and trial flights before large-scale production. Additionally, insurance is essential for covering losses of the aircraft and third-party liability risks during actual operations.

With market demand evident, insurers such as PICC, Ping An Property and Casualty, Taiping Property and Casualty, and China Life Property and Casualty are actively exploring the low-altitude economy. Data from the Reinsurance Research Institute indicates that the variety of insurance products related to the low-altitude economy in China is increasing, with over 30% of property insurance companies engaging in related business. As of July 2024, there were 45 insurance products registered with the China Insurance Industry Association that pertain to the low-altitude economy and/or unmanned aerial vehicles.

It is reported that PICC’s Chengdu branch customized a risk protection scheme for Zhongheng Dapeng that includes core coverage for aircraft and liability insurance, along with a claims service mechanism. By April 2025, this insurance project covered various operational scenarios of Zhongheng Dapeng drones, including surveying, power inspection, and emergency rescue, with a total insured amount of approximately 33.76 million yuan.

Industry experts believe that the development of low-altitude economy insurance still faces several challenges, such as a lack of sufficient historical data to support accurate risk assessment and pricing. Furthermore, the diverse types of aircraft and application scenarios complicate risk probability evaluation. Moving forward, insurance companies can promote data sharing and collaboration, innovate insurance products, and better support the development of the new economy.