E-mobility risk: take cover 

Despite these economic pressures, polls suggest public opinion continues to support action on climate change. An opinion poll in January 2022 found that only 29% said the UK can’t afford to implement policies addressing climate change; whilst a 54% majority of participants agreed with the statement that the UK can’t afford not to implement policies in the current economic climate. Consequently, the asset finance industry faces challenging demands from customers and an increasing focus on ESG credentials as measures such as the European Green Deal take effect, aiming to make Europe climate neutral by 2050, boost the economy through green technology, create sustainable industry and transport, and cut pollution.

But cutting costs and going green don’t need to be mutually exclusive. Adapting to climate change creates opportunities in the asset finance sector.

Great American Insurance is able to support lessors across the UK and Europe with directly relevant insurance products designed to de-risk their portfolio. Our bespoke and tailored insurance solutions offer a variety of ways to support lessors in their drive to capitalise on the green transition.

Now that the cost of filling up a family car has passed the £100 mark, the appeal of an electric vehicle (EV) which costs a fraction of that to charge is gaining momentum. EV sales in the UK and Europe continue to increase. According to the Society of Motor Manufacturers and Traders (SMMT), electric vehicle ownership in the UK rose by 71 per cent in 2021. In October 2021, the SMMT reported that pure EVs now represent close to 7% of all cars sold in the UK – up from just over 2% in 2019. Many European countries are similarly on track toward the example of Norway where 64.5% of all new cars sold in 2021 were fully electric.

The appeal of EVs as an employee benefit is strong, especially at a time when retaining key staff in the post-Covid employment market is an economic imperative. Salary sacrifice schemes, facilitated by low benefit in kind tax rates which effectively deliver EV leases to employees at approximately half the price, are a powerful retention tool. But they leave the employer exposed to early termination charges if an employee leaves before the scheduled lease end date. Great American’s Early Termination Insurance is designed to cover this risk, freeing employers to provide this valuable benefit and retain key talent in their business. The escalating cost of living raises the risk of redundancy once more, and our cover offers protection for this too, as well as for aspects of long-term sickness, maternity, paternity, adoption, and more.

Development of a charging infrastructure to support the EV transition requires both state funding and private investment. State support is changing, as evidenced by the UK government’s recent removal of the plug-in car charger grant in favour of investing in the national charging infrastructure. Private industry is adding to that investment; Instavolt, one of the UK’s largest EV charging point networks recently announced a scaled-up investment of over £100 million in public charging, with the aim of building a nationwide network of some 10,000 rapid EV chargers by 2032. Funding the expansion in the charging infrastructure provides additional opportunity for leasing companies, who can rely on Great American’s insurance products for cover on these construction projects and associated leased assets.

Heavy duty vehicles – trucks and buses - are responsible for 18% of greenhouse gas emissions from road transport in the UK and for some 5% of total EU emissions. It is estimated that by 2025, 25% of the new truck production will be electric, and the technology in this marketplace is constantly advancing. Toyota for example is developing a hydrogen combustion engine, and JCB has developed a range of hydrogen forklifts.

At Great American we have successfully adapted to developments in the truck fleet arena. Our GAP insurance offering with existing partners has been extended to include electric trucks. The first electric trucks are designed with a range of up to 400km and are used to deliver goods to city centre locations or in close proximity to the warehouse. However, manufacturers will continue to develop more efficient batteries to enhance range and Great American will be ready to meet their insurance needs. The ability of our underwriting teams to adapt to new developments in this way allows our partners to remain both competitive and secure in this rapidly evolving market.

As micro-mobility comes into focus and the cost of fuel makes getting into the car a considered choice, there has never been a better time for employers to implement a Cycle to Work scheme. The health benefits of cycling are well known; the reduction in emissions benefits the environment, and the cut in city congestion is an added bonus. Great American supports one of the largest Cycle to Work programmes in the UK as well as e-bike programmes in multiple European countries. Great American can facilitate e-bike and standard cycle programmes with physical damage cover and early termination protection.

Physical damage to the ever-expanding range of green assets is a concern for the asset finance sector, and we can insure photovoltaic panels, heat pumps, electric car charging points and a wide range of green assets.

Whether it’s for cars, trucks or bikes, or the underlying charging infrastructure and green assets, Great American is supporting the asset finance space through its range of physical damage insurance, GAP and early termination products. To find out more please contact Charles Maddren, Head of LLISL Products at Great American International Insurance (UK) Limited.