Liz Allan [00:00:02]:
Right. So, on today's episode, I have Steven Williams, the head of EV Strategy at Direct Line Group. He's also the head of Telematics and Connected Insurance, and he’s worked at Direct Line for 10 years. Thank you very much, Steven, for joining me. It's brilliant to see you.

Steven Williams [00:00:21]:
Hi, Liz. Thanks for inviting me on.

Liz Allan [00:00:23]:
We've bumped into each other a few times. We were just chatting before I started recording, and I got confused. I thought you were on the EV rally, but you weren't. You were at Move, but so many events are happening now.

Steven Williams [00:00:35]:
Sadly, I wasn’t on the EV rally this year. I did it last year—a fantastic experience. But with all the changes in our organisation, I couldn’t make it this year. We did, however, see each other at Move, and I was at the EV Summit last week, where I caught up with many familiar faces. Luckily, my role allows me to attend events and meet interesting people like yourself doing exciting things in the EV space.

Liz Allan [00:01:01]:
Oh, brilliant! And even though I was on holiday in Brittany during the summit, I had massive FOMO! I messaged you last week, saying it felt wrong not being there. At least we had some sunshine, so it was nice to relax.

Steven Williams [00:01:20]:
At least you had some sunshine! Not all of us did this summer.

Liz Allan [00:01:25]:
There was quite a lot of rain to start with. Anyway, let's talk about you. As I mentioned, you’ve been at Direct Line for a long time—it must be a great company. Tell me about your background and what led you to Direct Line.

Steven Williams [00:01:56]:
Sure. It’s scary, but I’ve been working for 25-26 years. I started in financial services, working for HBOS (Halifax Bank of Scotland) for about ten years. I worked through the financial crisis of 2008, which was an incredible learning curve—not necessarily for the best reasons, but you learn a lot about yourself in stressful situations.

After HBOS, I took redundancy because the industry changed. I became a relationship manager, working with small and medium-sized businesses, which allowed me to tap into my entrepreneurial side. That role changed, and I decided it wasn’t for me anymore. I then bumped into someone I used to work with who was working for Go Compare, and they asked if I’d heard of it. At that time, I hadn’t, but I joined them, working as a relationship manager and later in new product development. I spent four years there, and it was great working for a smaller organization where you were involved in every part of the business.

Then, 10 years ago, I chatted to Ian Exworth, who worked at RSA at the time. He was looking for someone to join Direct Line to work with price comparison websites, specifically for Churchill and Privilege, two of our other brands listed on those platforms. So, I made the move to Direct Line.

Liz Allan [00:04:24]:
Wow, that’s a big shift! And I think you said earlier that you went through three of the most stressful life events in one month.

Steven Williams [00:04:31]:
Yes, I did! We sold our house, moved into rented accommodation, I started my new job at Direct Line in London, and a month later, my daughter was born! So, we moved house, I started a new job, and we had a baby—all in the same week. I definitely wouldn’t recommend doing that.

Liz Allan [00:05:06]:
Oh my goodness, that must have been intense!

Steven Williams [00:05:07]:
Yes, my wife still talks about how convenient it was for me to get a job in London. This meant I was away two nights a week with a newborn at home, but we’re still together, so it couldn’t have been that bad!

Liz Allan [00:05:23]:
She must really love you!

Steven Williams [00:05:27]:
Yes, I’m lucky! But looking back, it probably wasn’t the most sensible decision to do all of that at once. I’ve spent six and a half of my ten years at Direct Line managing relationships with price comparison websites. Three and a half years ago, Ian, who brought me into Direct Line, moved to our commercial business and started looking into electric vehicles (EVs). He asked if I wanted to get involved, and that’s how I ended up in the EV space.

Steven Williams [00:06:16]:
We started by attending Fully Charged in Farnborough with a small team, which blew us away. We realized how much further along the EV transition was than we thought. Direct Line had always insured EVs since the Nissan Leaf, but after Fully Charged, we realized we needed to get more involved. So, we did more research and eventually formed a new team, the EV Strategy Team, which I now lead. My role has evolved from going out and understanding the market to helping prepare our brands—Direct Line, Churchill, Privilege, and our newer ones like Darwin and By Miles—for the EV transition.

Liz Allan [00:08:46]:
That’s really interesting. It sounds like you’ve got a wide-ranging remit now.

Steven Williams [00:08:50]:
Yes, my role now involves looking at every aspect of the EV transition. This includes everything from repairs—where we’ve had to think about new technology and how to repair EVs sustainably—to pricing and underwriting, where we need to understand how EV drivers behave differently from ICE (internal combustion engine) vehicle drivers. We’re even looking at how to tow an EV differently, as you can’t tow it the same way as an ICE vehicle. Our recovery service, Green Flag, has to adapt to these changes too.

Liz Allan [00:12:43]:
I hadn’t even considered connected insurance and how the vehicle's data flows between the car and the insurer. That's really interesting.

Steven Williams [00:13:54]:
Yes, connected insurance is evolving. It’s not just about young drivers with a black box in their car anymore. It’s about connected mobility, where the car can share data on how you drive, where you drive, and even if you've had an accident. This data helps us create products better suited to the customer and helps us understand how to shape services in a connected future.

What’s exciting is that cars are becoming smarter and more connected daily. For example, at Fully Charged, there was a moment where they asked how many people had smart meters, and most people stood up. Then they asked how many had a smart thermostat, and I smugly stayed standing. But when they asked how many had an electric car, I had to sit down. Most people stayed standing, though. Then they asked how many had solar panels and even batteries for storage; again, most stayed standing. Clearly, we’re still in the early adopter stage, but the momentum is building quickly.

That event made us realize how far ahead some people are, especially with all the new technology surrounding energy storage and EVs. It also highlighted how important it is for insurers to be ready for this transition. People’s needs and behaviours are changing with these new technologies, and we need to adapt accordingly.

Steven Williams [00:15:57]:
We’ve seen that EV drivers care about many of the same things as ICE drivers, such as whether the car’s boot is big enough for a pushchair or golf clubs and if it can fit car seats. However, there are also new factors like range anxiety and charging infrastructure, which are unique to EVs. It’s interesting to see how these considerations are evolving, and we must keep up with these changes.

Internally, we’ve done much work to educate our teams about EVs. We’ve hosted webinars with industry experts like Melanie from Zap-Map and the EV Café crew, as well as Octopus Energy, to discuss smart charging, solar panels, and energy tariffs. It’s about ensuring everyone in the company is up to speed on these developments so we can offer our customers the best products and services.

Steven Williams [00:18:10]:
When it comes to insurance, EVs present many unique factors. For example, you can’t tow an EV the same way you would an ICE vehicle. The recovery process is different, and we’ve had to rethink how we approach these situations. We’re constantly learning and adapting to these new challenges.

Another example is battery health. Currently, we don’t have the diagnostic tools we need to assess a battery’s condition after an accident. Ideally, we’d be able to tell if the battery was damaged and needs to be replaced or if it’s still in good condition. This would help us streamline the repair process and reduce costs, but we don’t have that visibility right now.

Liz Allan [00:20:12]:
That’s really interesting. I hadn’t considered battery health and how that impacts insurance. It makes sense that you’d want to monitor this closely.

Steven Williams [00:20:25]:
Yes, absolutely. Battery technology is a massive part of the equation, and we’re still in the early stages of understanding how to manage it effectively. The battery is often the most expensive part of an EV, and we must find ways to repair and replace them efficiently. As technology improves, I’m hopeful we’ll have better diagnostic tools to help us assess the battery's condition after an accident.

Another challenge we face is the shortage of EV-qualified mechanics. According to the Institute of the Motor Industry, there are about 39,000 EV-qualified mechanics in the UK, but they estimate we’ll need an additional 16,000 by 2032. This shortage drives up the cost of repairs, as fewer people are qualified to work on EVs.

Liz Allan [00:22:05]:
That’s a big gap! How do you think the industry will address that shortage?

Steven Williams [00:22:10]:
It’s a challenge, but we’ll see more investment in training and upskilling mechanics to work on EVs. The demand for EVs is growing, and as more people transition to electric vehicles, the industry will have to adapt. We’re already seeing some progress in this area, but it’s going to take time to close that gap fully.

Another thing we’re looking at is how to recycle and reuse EV batteries. When a car is written off, the battery can often still be in good condition, and we’re exploring ways to salvage and reuse those batteries. This could help reduce costs and make the repair process more sustainable.

Liz Allan [00:23:45]:
That’s really fascinating. I hadn’t thought about reusing batteries before, but it makes perfect sense.

Steven Williams [00:23:55]:
Yes, we’re really excited about it. The circular economy is becoming more important, and finding ways to recycle and reuse batteries is a big part. We’re working closely with manufacturers and other industry partners to explore these opportunities.

Liz Allan [00:25:05]:
It sounds like a lot of innovation is happening in the EV space. What do you think the future holds for EV insurance?

Steven Williams [00:25:17]:
I think we’re going to see a lot of changes in the coming years. As technology improves and EVs become more mainstream, I believe the insurance cost will decrease. Right now, we’re still in the early stages of the transition, and there are a lot of unknowns. But as we gather more data and improve our processes, I think we’ll see a more stable and affordable insurance market for EVs.

In addition to that, I think connected insurance is going to play a huge role in the future. Telematics and connected vehicles are already giving us access to so much data that we can use to assess risk more accurately. Currently, insurance pricing is still primarily based on traditional risk factors like age, location, and the make and model of the vehicle. But with connected vehicles, we’ll be able to take into account real-time data on how the vehicle is being driven, which could lead to more personalized and dynamic pricing.

For example, you could have two people driving the exact same make and model of EV, but one might be using regenerative braking more efficiently or driving more carefully, and that could be reflected in their insurance premium. We’re also seeing more cars with over-the-air software updates, which means that the features and safety systems in the car could change over time. This kind of connectivity will allow insurers to offer more tailored products that reflect how the vehicle is being used.

Liz Allan [00:26:40]:
That’s fascinating. I hadn’t considered how real-time data could affect insurance pricing, but it makes perfect sense. How do you think the role of insurers will change as vehicles become more connected and autonomous?

Steven Williams [00:26:55]:
It’s a really interesting question. As vehicles become more autonomous, the role of the driver in preventing accidents will diminish, and the focus will shift to the technology in the vehicle. That raises questions about liability—if an autonomous vehicle is involved in an accident, who is responsible? Is it the driver, the vehicle manufacturer, or the software provider? These are the kinds of issues that we’ll need to work through as the technology evolves.

We’re already seeing some of these challenges with the advanced driver-assistance systems (ADAS) that are in many new cars today. Features like lane-keeping assist, adaptive cruise control, and automatic emergency braking are all designed to make driving safer. Still, they also add complexity when assessing risk and determining liability.

As we move toward full autonomy, I think we’ll see a shift from insuring individual drivers to insuring the technology itself. It’s going to be a fascinating time for the industry, and we’re working closely with regulators and manufacturers to make sure we’re ready for these changes.

Liz Allan [00:27:54]:
It really does sound like the future of insurance is going to look very different from what we’re used to today. What other trends do you think will shape the future of the industry?

Steven Williams [00:28:04]:
One of the big trends we’re watching is the growth of shared mobility. With the rise of ride-sharing services like Uber and Lyft, and the increasing popularity of car-sharing and subscription services, we’re seeing a shift away from individual car ownership. That has big implications for insurance because traditional motor insurance is built around the idea of an individual owning and driving a vehicle. As more people move toward shared and subscription-based models, insurers must adapt.

We’re also seeing an increase in electric vehicles in the commercial fleet sector. Many large companies are making the switch to electric, and that’s creating new opportunities for insurers to develop products specifically tailored to fleets of EVs. This is particularly important when considering the different risks associated with EVs, such as battery health and the availability of charging infrastructure.

Liz Allan [00:28:53]:
That makes sense. And speaking of charging infrastructure, how do you see the development of public charging networks impacting the adoption of EVs?

Steven Williams [00:29:03]:
Charging infrastructure is one of the key factors in the transition to EVs. Range anxiety is still a major concern for many people, and the availability of reliable charging points is crucial to overcoming that. We’re seeing significant investment in charging networks, but there are still challenges, especially for people who don’t have access to off-street parking and needing public chargers.

As insurers, we need to think about how charging infrastructure affects risk. For example, if someone regularly charges their EV at home using a properly installed home charger, that’s a relatively low-risk scenario. But if they’re relying on public charging points, there might be more potential for accidents or damage to the vehicle. We’re also looking at how smart charging technology, which allows vehicles to charge during off-peak hours when electricity is cheaper, could play a role in reducing costs for EV owners.

Liz Allan [00:29:54]:
It sounds like there’s still a lot of work to be done in terms of building out the infrastructure, but we’re moving in the right direction. What are the biggest challenges facing the insurance industry as we move towards 2030 and beyond?

Steven Williams [00:30:07]:
One of the biggest challenges is keeping up with the pace of change. The automotive industry is evolving so quickly, and as insurers, we need to make sure we’re keeping up. That means staying on top of new technologies, understanding how they impact risk, and working with regulators to ensure that our products meet the needs of consumers.

Another challenge is the skills gap. As we’ve discussed, there’s a shortage of qualified EV mechanics, but there’s also a need for more expertise in areas like battery technology, autonomous driving systems, and connected vehicles. Insurers will need to invest in training and upskilling their workforce to ensure we have the knowledge and capabilities to handle these new technologies.

Finally, we need to make sure that insurance remains affordable. As we’ve seen, the cost of repairing EVs can be higher than repairing ICE vehicles, but as the technology matures and becomes more widespread, we expect those costs to come down. We must continue to innovate and find ways to reduce costs so that insurance doesn’t become a barrier to EV adoption.

Liz Allan [00:31:13]:
That’s a perfect point. Affordability is key, especially as we move toward the 2030 target. What do you think needs to happen to accelerate the adoption of EVs?

Steven Williams [00:31:25]:
There are a few things that I think will help accelerate adoption. First, we need to continue to build out the charging infrastructure. The more accessible and reliable the charging network is, the more confident people will feel about making the switch to electric. We also need to address the upfront cost of EVs, which is still a barrier for many people. Government incentives, such as grants and tax breaks, have been helpful, but we need to look at other ways to make EVs more affordable, such as reducing the VAT on public charging or offering incentives for used EVs.

Education is also important. There’s still a lot of misinformation about EVs, and many people don’t fully understand the benefits or how the technology works. We need to do a better job of educating consumers so they feel confident in making the transition.

Liz Allan [00:32:14]:
That’s so true. There’s a need for more education around EVs. Well, Steven, this has been such a fascinating conversation. I could talk to you for hours, but we’re running out of time. Thank you so much for sharing your insights with us today.

Steven Williams [00:32:29]:
Thanks for having me, Liz. It’s been great to chat with you, and I’m really excited about where the industry is heading. There’s so much potential for innovation, and I think we will see some fascinating developments in the coming years.

Liz Allan [00:32:40]:
Absolutely. Thank you again, Steven, and thank you to everyone listening. We’ll be back with another episode soon!