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Freight decarbonization is widening insurance claims gaps
An AXA XL report says battery-electric lorries can cost 20% to 25% more to repair than internal combustion vehicles, raising claim severity even if collision frequency is similar or better.
A report from Reuters Events and AXA XL warns that freight decarbonization is outpacing the insurance and repair infrastructure needed to cover the new risk profile across road, sea, and air. The analysis highlights that transport is the second-largest source of global carbon emissions, contributing almost half as much as electricity and heat production combined.
According to Insurance Business, UK brokers are seeing claims and coverage complications as electric lorries become more common and maritime fuel plans remain unsettled. The report points to an absence of an agreed fuel strategy for cargo ships and notes that the maritime sector’s guidelines were formalized only months ago.
On road freight, battery-electric drive trains have largely won over hydrogen fuel cells, citing DNV’s 2026 Energy Transition Outlook. But AXA XL data in the report indicates electric vehicles cost 20% to 25% more to repair at the same damage level, with higher battery replacement costs, shortages of specialist technicians, and calibration equipment needs for manufacturer standards.
AXA XL also says the severity of losses can rise significantly due to these repair costs, even if collision frequency appears comparable or improved. The report includes examples of longer repair times, including an average three-month repair period for one major electric vehicle manufacturer, where replacement hire costs can push claims beyond the vehicle’s value, and it notes four new manufacturers entered the UK market last year.