How the EV revolution could affect costs and premiums. By Peter Smits, managing director, Ashbourne Insurance. The general UK insurance market is expected to grow in 2026 –
How the EV revolution could affect costs and premiums. By Peter Smits, managing director, Ashbourne Insurance.
The general UK insurance market is expected to grow in 2026 – and commercial motor insurance is expected to be a contributor. More businesses will mobilise, while increased uptake of electric vehicles – especially vans – will lead the way for growing fleet sizes and vehicle transitions.
Advances in technology and risk management are increasingly being used by fleet underwriters and in claims control – and this provides those fleet operators with good risk management controls an opportunity to benefit from improved premiums in 2026. There is both opportunity and challenge with the shift to EVs as newer fleets may be better managed, but that could come with increased risk/cost implications.
Claims inflation, parts and repair costs pressures remain and while the underlying premium increases seen in previous years may have eased, EVs cost more to repair, and parts and labour costs remain inflated.
The broader motor insurance market is facing worsening profitability. While the least optimistic projections are for ‘personal’ vehicles, many of the costs pressures will overflow into commercial vehicles and fleets. We are seeing some insurers being more selective about their fleet risks, with some carriers not inviting certain renewals or those with weaker profiles and poor risk management seeing premium increases or restricted covers.
Although the overall projection is that premium increases may be lower than in previous years – circa 4% – don’t be surprised if your insurer is a little more forensic in their risk analysis pre-renewal and fleet operators should not be expecting sharp premium reductions or discounts.
Among emerging risks, EVs continue to bring new repair cost dynamics – and with them risk modelling uncertainties. Social changes, for example: the push for zero-emission vehicles and driver behaviour regulation, in addition to changes to legal costs, all impact on pricing models. And then there is the general market volatility brought about by economic pressures, inflation and supply chain issues, which may cause unexpected cost spikes for all.
So the general outlook for 2026 will see those well-managed fleets with good risk controls having only modest premium increases. The more you can demonstrate strong risk management, the more competitive the terms; however fleets with poor claims history, older vehicles or hazardous operations may well face increases and tougher terms.
While I’m sure, like me, you will not be shedding too many tears for fleet insurers where underwriting margins remain under pressure, there is little doubt that if these cost pressures continue and premiums don’t keep pace, profitability will be squeezed and fleet operators can expect more scrutiny from their insurers. As I mentioned earlier, some insurers may look to restrict or withdraw capacity in more marginal or niche trades – and I recommend that those requiring bespoke cover plan well ahead of renewal, potentially using specialist brokers. Those with a high propensity to EVs will need to account for increased repair times, data-led risk management and telematics.
A final word of warning – I said at the start that the commercial motor insurance market is expected to grow in 2026, but, as a consequence, as the market grows, so do vehicle numbers and also claims!
In summary, my recommendations for all fleet operators in 2026 are:
