Assurant Inc., one of the leading finance-and-insurance providers, is rolling out electric and hybrid vehicle products in the U.S. The introduction of these new products indicates the company's growing faith in EV adoption in North America.
Unlike some competitors, Assurant hasn't formally introduced F&I products specific to EVs until now. Some EV protections are included in Assurant's service contract products, said Martin Jenns, senior vice president of global transformation for the global insurance company.
"We felt the timing was appropriate, given the pivot we've seen in the market," Jenns said. "While the global distribution of electric vehicles as a percentage of the overall market today is relatively small, we think the timing is good and aligned to the core values of Assurant and our [environmental, social and corporate governance] initiatives."
Assurant launched its electric vehicle product, Assurant EV One, in the U.K. in May 2020. After the U.S., Assurant will roll it out in other global markets.
Ongoing regulatory pressure from President Joe Biden's administration and industrywide plans to increase EV output also add motivation to the industry to adapt to EV sales.
The F&I product landscape for EVs has rapidly changed over the past few years, though the penetration of EV sales remains slim compared with sales of internal combustion engine vehicles. In the fourth quarter of 2020, electric and hybrid vehicle sales comprised 6.7 percent of new-vehicle financing, according to credit bureau Experian. That's up from 2.99 percent in 2016's fourth quarter.
Assurant EV One products cover mechanical repairs and wear and tear maintenance. The products adjusted for the North American market can cover breakdown in a variety of areas including electric propulsion systems, navigation and entertainment systems, electrical, steering, transmission, brakes, suspension and more.
Assurant works with about 5,000 U.S. dealerships, the majority of which are franchised.
Though Jenns expects EV F&I product sales to remain a small fraction of the company's sales, reflecting industry adoption, the intricacies of EV maintenance offer numerous F&I product sales opportunities.
"One of the big differences that we find in electric vehicles is that this not a repair and replace, it's a remove and replace," he said. "You've got to use original equipment parts for the replacement, and there's not much available in the way of refurbished parts at this point in the industry as a whole."