Millions of new energy car owners look over! New energy vehicle insurance is coming

Economic Observation Network reporter Jiang Xin After three years of discussion, the industry's high-demand new energy vehicle insurance has finally taken a step in the door.

On December 14, the Insurance Industry Association officially issued the Exclusive Clauses for Commercial Insurance of New Energy Vehicles (Trial Implementation) (hereinafter referred to as the Exclusive Clauses). At the same time, the China Association of Actuaries released the "New Energy Vehicle Commercial Insurance Benchmark Pure Risk Premium Table (Trial)", which also means that the new energy vehicle insurance is another important step from the official launch.

According to statistics from the Ministry of Public Security, the number of new energy vehicles in 2020 reached 4.92 million, an increase of 29.1% year-on-year. Looking at the world, China's new energy vehicle ownership accounts for nearly 50%, and continues to play the role of industry leader. However, although the new energy vehicle insurance supporting it is frequently mentioned, it has not been landed for a long time.

New energy vehicles with power batteries as energy storage devices, vehicle auxiliary equipment extended to charging facilities, in the process of vehicle use, in addition to the traditional traffic accident risk, power battery fire, deflagration caused by major accidents constitute a new risk factor, but the traditional car insurance can not cover the above risks. In August this year, heavy rain in Henan caused 400,000 vehicles to be soaked, and new energy vehicles brought great claims problems due to the difference in power and other aspects of traditional fuel vehicles.

This also means that product innovation is needed to existing car insurance and upgrade insurance protection and insurance services. With the landing of the "Exclusive Clause", millions of new energy vehicle owners may usher in exclusive customized insurance.

What kind of new energy car insurance

The so-called new energy vehicles refer to wheeled vehicles, tracked vehicles and other means of transport that use new power systems, are driven entirely or mainly by new energy, and are used for passenger use by personnel or for transporting goods and special operations on the road, but do not include motorcycles, tractors and special vehicles.

New energy vehicle insurance consists of three main insurances and several additional insurances. The main insurance includes three independent types of insurance: new energy vehicle loss insurance, new energy vehicle third-party liability insurance, and new energy vehicle vehicle personnel liability insurance. The insured may choose to insure all the special terms or some of them. Additional insurance services are supplemented with external grid fault loss insurance, additional self-use charging pile loss insurance, additional self-use charging pile liability insurance, additional intelligent auxiliary driving software loss compensation insurance, additional fire accident limit doubling insurance, additional new energy vehicle value-added service special clauses, etc.

Specifically, the "Exclusive Clauses" combine the characteristics of charging new energy vehicles to develop the "Self-use Charging Pile Loss Insurance" and "Self-use Charging Pile Liability Insurance", which not only covers the loss of the car, but also includes the loss of auxiliary equipment such as charging piles and the property losses and personal injuries that may be caused by the equipment itself; and concentrates on solving the risks arising from auxiliary facilities in the application of new technologies. The relevant person in charge of the China Insurance Association said that this is the first time that auto insurance has underwritten external fixed auxiliary equipment, and it is an innovation and exploration in the field of auto insurance.

Combined with the risks in the charging process of new energy vehicles, the "Additional External Grid Fault Loss Insurance" is designed to cover vehicle losses caused by external power grid transmission and transformation faults, current and voltage abnormalities, etc., and to disperse risks through the insurance mechanism.

The above-mentioned person in charge also said that the "Exclusive Clause" is expressed in a columnar manner, highlighting the structural characteristics of the "three electricity" system of new energy vehicles. Such as batteries and energy storage systems, motors and drive systems, etc., the text content is clear at a glance, which is convenient for consumers to read and understand. At the same time, the scope of protection is extended to vehicle-specific use scenarios, such as self-service charging, special vehicle engineering operations, etc., upgrading and optimizing the connotation and extension of traditional car insurance, and enhancing the applicability and pertinence of the terms.

Compared with the Model Clauses for Motor Vehicle Commercial Insurance of the China Insurance Industry Association (2020 Edition) (hereinafter referred to as the "Model Clauses") issued by the China Insurance Association in September 2020, the Exclusive Clauses delete the engine wading insurance that is not suitable for most new energy vehicles, and modify the special clause of additional motor vehicle value-added services to the special clause of additional new energy vehicle value-added services.

The depreciation rate of new energy vehicles is also different from that of traditional fuel vehicles. The change in the depreciation rate of new energy vehicle insurance is mainly reflected in the family cars with less than 9 seats and non-operating buses. Compared with the depreciation rate of 0.6% of traditional fuel vehicle insurance, the depreciation rate of new energy vehicle insurance is divided into pure electric vehicles and plug-in hybrid and fuel cell vehicles according to the fuel type. Among them, the depreciation rate of pure electric vehicles is significantly higher than that of other models, and the lower the price, the faster the depreciation, the reason is that the lower the price of pure electric vehicles, the higher the battery price, so the faster the depreciation.

The insurance and loss rates are both high

In September 2020, China put forward the climate goal of striving to reach carbon peak by 2030 and carbon neutrality by 2060, and it is imperative to promote new energy replacement. According to iResearch data, it is expected that the annual sales of new energy vehicles will be 3.268 million units, accounting for 12.3% of automobile sales. In addition, with reference to the development vision of new energy vehicle sales accounting for about 20% in 2025 in the "New Energy Vehicle Industry Development Plan (2021-2035)", it is expected that China's new energy vehicle sales will exceed the 7 million mark in 2025, with an average annual compound growth rate of 39.8% in 2020-2025.

The rapid growth of the number of new energy vehicles also means the urgency of landing new energy vehicle insurance. The cost structure of new energy vehicles and traditional fuel vehicles is very different, so there are great changes in the risk structure and risk cost of new energy vehicles.

The core power system of new energy vehicles is composed of batteries, motors and electronic controls, which replace the engine, transmission and other devices of fuel vehicles, so the protection of the core components of traditional car insurance on automobiles is not suitable for new energy vehicles; in addition, the scope of liability in the terms of traditional car insurance cannot cover the specific risk factors faced by new energy vehicles, including battery failure, charging fault liability, etc., so it will be difficult for new energy owners to claim after the risk occurs.

In the heavy rains in Henan in August this year, 400,000 cars were soaked, and new energy vehicles encountered claims problems because they did not have engines. The damage to the new energy battery due to rain soaking and the need to be replaced are not covered by the insurance company.

However, the promotion of new energy vehicle insurance is relatively slow, an insurance industry insider said that the main reason is that for insurance companies, the frequency and loss rate of new energy vehicles are higher than that of traditional fuel vehicles, and the insurance company's enthusiasm for underwriting new energy vehicles is relatively poor.

The comprehensive reform of automobile insurance was promoted nationwide after September 19, 2020, due to the decline in the surcharge rate, the average premium of vehicles generally fell by more than 20%, insurance companies generally faced greater pressure on the scale of premiums and urgently needed to improve the quality of underwriting business, on the other hand, the insurance rate of new energy vehicles was much higher than that of traditional fuel vehicles.

Shenwan Hongyuan Research Report shows that compared with traditional fuel vehicles, there are large differences in the risks associated with the three electric systems of new energy vehicles (power batteries, drive motors and electronic control systems) in the process of use. Although the average premium of new energy vehicle insurance is significantly higher than that of traditional fuel vehicles, it still cannot make up for the increase in compensation costs caused by the high frequency of insurance and the average compensation of cases.

Emerging businesses are often accompanied by higher risks and more uncertainty, new energy vehicle compensation data is still in the accumulation stage, and insurance companies as a whole are in a passive state of pricing. At present, the loss ratio of new energy vehicle insurance generally exceeds 85%, and the industry is facing greater underwriting loss pressure. Due to poor pricing ability and weak customer screening ability of small and medium-sized companies, the comprehensive cost rate of new energy vehicle insurance exceeds 110%; the head company basically maintains underwriting breakeven by virtue of its natural advantages in pricing, customer reserves and manufacturer cooperation capabilities.

Car insurance competes for a new arena

The White Paper on the Ecological Co-construction of China's New Energy Vehicle Insurance (hereinafter referred to as the "White Paper") believes that under the background of fierce competition in the current stock of the auto insurance industry and the meager operating profits, new energy exclusive auto insurance has undoubtedly opened up a new incremental market. For insurance companies, new energy exclusive car insurance helps to price more accurately, thereby alleviating the pressure of compensation and improving operating profits; for consumers, new energy exclusive car insurance fills the pain points of insufficient protection of traditional car insurance, helps to eliminate consumers' doubts about car purchase and improve consumers' car experience.

For car companies, car insurance has also become a new gripper for car insurance services.

On September 22 this year, Tesla CEO Elon Musk shared the details of the company's launch of insurance services on social platforms. It is understood that Tesla plans to provide Tesla owners with insurance protection and claims management services, and the car insurance discount is as high as 20%-30%. Car owners can pay monthly premiums and no other fees. If the owner is not satisfied, he can cancel or change the insurance he has purchased at any time.

Car insurance is the first service product that consumers come into contact with when buying a car, in the past, the car sales terminal was mainly controlled by dealers, so the car dealer channel has also become the most important sales channel for car insurance (especially new car insurance). The "White Paper" believes that the rigid attributes and stickiness of car insurance enable dealers to control the service entrance of car owners, thereby expanding auto aftermarket business such as auto maintenance, claim repair, and auto finance. Usually, the profit margin of the automotive after-sales service market is much higher than that of the automobile manufacturing link, so the profit value it creates often accounts for 50-60% of the entire automotive industry chain, but the participation of car companies in the traditional service model is very limited. In the context of the current "disintermediation" and the reconstruction of the relationship between "people, vehicles and factories" of new energy vehicles, car companies are expected to face end consumers on the basis of direct sales model and automobile networking, and the future vehicle delivery is only the starting point for car companies to create value.

The intelligence of new energy vehicles makes the traditional car insurance model urgently need to be changed. Although in the context of comprehensive reform of automobile insurance, insurance companies have mastered the pricing autonomy to a certain extent and can differentiate pricing according to their own business conditions, but because insurance companies cannot grasp the data of car owners, they are still offline pricing methods of "from the car" in product design. In the era of intelligent cars, the value of data will be used to the greatest extent, under the premise of data security compliance, the driving behavior, mileage, and length of time spent by car owners will become an important basis for car insurance pricing, so as to provide owners with personalized car insurance products. In addition, based on sensor data and artificial intelligence algorithm analysis, smart cars can effectively intervene in dangerous driving behaviors, thereby reducing the accident rate and controlling the car insurance compensation rate.

At the claims stage, the driving process data can assist the insurance company to remotely admit the loss and recommend the repair shop, thereby improving the efficiency of post-insurance service. Therefore, under the new auto insurance service chain, car companies will become important players and occupy the leading role in auto insurance operations.

However, a property insurance sales person said that car companies also face some difficulties in carrying out car insurance business, such as the acquisition of business licenses is not easy, the strict requirements for online systems under the direct sales model and the docking with insurance company systems also have the problems of large costs and long cycles. Because of this, some car companies have adopted the model of cooperation with insurance companies to explore in the field of car insurance.