The Philippines recently brought in a law seeking to regulate and develop the electric vehicles segment and motor insurers are upbeat about the opportunities ahead – but lack of data is a major concern. By Jimmy John
The Electric Vehicle Industry Development Act (EVIDA) became a law in April 2022 in the Philippines, outlining the government’s policy on the regulation and development of electric vehicles (EVs) in the country.
The act specifically aims to promote the industry as a feasible mode of transportation to reduce dependence on fossil fuels and also governs the manufacture, assembly, importation, construction, installation, maintenance, trade and utilization, research and development, and regulation of electric vehicles.
The act further states that various industries like cargo logistics, food delivery companies, tour agencies, hotels, power utilities and water utilities are required to have a 5% EV quota for their vehicle fleets, whether owned or leased, under a timeline that will be determined by the industry roadmap.
EVs to see spurt in growth
The Philippines market currently has only a few EV operators, but with the passing of the EVIDA more manufacturers are likely to enter the market and with government support and backing the market is likely to see increased adoption of EVs in the days ahead.
The government also seeks to build an entire ecosystem supportive of EVs by requiring the department of energy to create an EV roadmap that will form part of the country’s energy plan. It will include a charging infrastructure and fiscal and non-fiscal incentives.
Aside from this, the act will also help establish a widespread charging network in the Philippines, necessary infrastructure that will help make buying an EV an attractive and sustainable option.
Insurers upbeat on opportunities
Philippine Insurers and Reinsurers Association (PIRA) executive director Michael Rellosa said that the industry is already receiving queries regarding underwriting of EVs but does not see any impact on the premium pricing considering that motor car rates in the Philippines are dependent on the use of the vehicle.
“If the EV is for private use, then the premium rate will be calculated under a private car and if it is for commercial or business purpose, then commercial vehicle rate is used,” he said.
Absence of claims data to impact underwriting
The Philippines government has gone all out to promote EVs and plans to impose zero tariffs on EV imports and to this effect the department of energy has endorsed to the board of investments a PHP2.5bn ($44.9m) investment by Century Peak Energy Corporation to bring in 20,000 EVs into the country and eventually build 5,000 EV charging stations.
Mr. Rellosa believes that the greatest challenge for EVs and the motor insurance industry is the absence of credible and accurate data on claims for EVs.
“Initially there would be hesitancy on the industry to underwrite EVs but given that EVs are already on the roads in a number of countries, we can learn from these countries,” he said.
He believes that PIRA can touch base with similar organizations in other countries and compare practices and processes.
Source: asiainsurancereview.com