New energy vehicle insurance is finally here: for the first time, the premium for out-of-car equipment may fall slightly

New energy vehicle insurance is finally here.

On December 14, the China Insurance Industry Association issued the Exclusive Clauses for Commercial Insurance for New Energy Vehicles (Trial Implementation) (hereinafter referred to as the "Clauses"). In terms of insurance liability, the Clause not only provides protection for the "three electric" system (battery, motor and electronic control of electric vehicles), but also comprehensively covers the use scenarios of new energy vehicles driving, parking, charging and operation. In the development of the terms, the "Provisions" not only consider the current mainstream technical route, but also leave room for innovation in the new formats of the new energy automobile industry.

iResearch consulting report shows that overall, in the current auto insurance industry stock competition, operating profits are meager, new energy exclusive auto insurance undoubtedly opened 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.

The same as the traditional terms result in high payouts

In recent years, the technological progress of China's automobile industry is changing with each passing day, and the new energy automobile industry is advancing by leaps and bounds. According to the China Association of Automobile Manufacturers, the production and sales of new energy vehicles from January to November 2021 reached 3.023 million units and 2.99 million units, respectively, an increase of 1.7 times year-on-year; the market penetration rate reached 12.7%, showing a month-on-month upward trend. At the same time, the "New Energy Vehicle Industry Development Plan (2021-2035)" proposes that by 2025, new car sales of new energy vehicles will reach 20% of total new car sales; by 2035, pure electric vehicles will become the mainstream of new cars.

New technologies bring new challenges, new energy vehicles to 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 new risk factors, for these risks, the need for product innovation, in the insurance protection and insurance services to achieve upgrading.

"New energy vehicles in the body structure, power system, maintenance and other aspects are more different than traditional fuel vehicles, showing differentiated risk characteristics, in the past two years, new energy vehicles and traditional car insurance using the same terms resulting in high compensation." The person in charge of a property insurance company confessed.

Ge Yuxiang, an analyst at Shenwan Hongyuan Insurance Industry, said that the trend of accelerating the transformation of new energy vehicles, especially pure electric vehicles, in the automotive industry is unstoppable, and the explosive growth of new energy vehicles has led to the release of new energy vehicle insurance demand. At present, insurance companies are relatively less enthusiastic about underwriting new energy vehicles. On the one hand, after the comprehensive reform and promotion of automobile insurance, insurance companies urgently need to improve the quality of underwriting business; on the other hand, the insurance rate of new energy vehicles is much higher than that of traditional fuel vehicles, and the compensation data is still in the data accumulation stage, and the insurance company as a whole is in a passive state of pricing. New energy vehicle insurance is the "last mile" connecting new energy vehicles and consumers, how to effectively resolve the contradiction between the growing demand for new energy vehicle insurance protection of car owners and the poor enthusiasm of insurance companies on the supply side will be a common topic in the industry.

Therefore, how to scientifically design insurance products under the condition of continuous iterative updating of technology and less accumulation of insurance experience data has become a problem that must be solved in the development process of new energy vehicle products.

For the first time, car insurance covers external fixation aids

The pure risk premium price factor of new energy vehicle insurance is quite different from that of traditional fuel vehicles. Ge Yuxiang analyzed it from three aspects: from the perspective of vehicle factors, the core component battery risk is prominent. The new energy vehicle three-electric system accounts for about 60% of the total vehicle cost, and the maintenance man-hour cost and accessories cost are high, and the lack of industry unified standards leads to higher claim costs than traditional fuel vehicles. Power batteries account for about 40% of the cost of the vehicle and are accompanied by a certain risk of spontaneous combustion, if they are hit, they may not be repaired locally and the entire battery pack needs to be replaced. At the same time, the bargaining power of car companies is strong, and it is difficult to control maintenance costs in insurance.

From the perspective of human factors, the driver's failure to adapt to the body structure caused by the driving habits has a greater impact (such as the application of single pedal mode and power recovery system, low noise when driving at low speed, etc.), and the lack of knowledge of the driver's maintenance and repair of new energy vehicles may lead to improper maintenance and improper charging of new energy vehicles.

From the perspective of local factors, the lack of industry norms for charging piles complicates the risks of new energy vehicles, and the risk of public charging piles is higher than that of private charging piles. The potential risks of autonomous driving technology are high.

Combined with the characteristics of charging new energy vehicles, the "Clause" develops the "Self-use Charging Pile Loss Insurance" and "Self-use Charging Pile Liability Insurance", which not only covers the loss of the vehicle, 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 caused by auxiliary facilities in the application of new technologies. This is the first time that auto insurance has underwritten external fixed auxiliary equipment, which is an innovation and exploration in the field of auto insurance.

The "Articles" use a listed expression to highlight 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.

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.

Liu Xinqi, chief analyst of Guotai Junan's non-bank financial industry, said that compared with the traditional fuel vehicle clauses, the core of the clauses is to design new energy vehicle clauses from the aspects of insurance liability and additional insurance: clarify the exclusive protection scope and exemption liability of new energy vehicles, and increase specific insurance liabilities including fire combustion, battery and energy storage systems, motors and drive systems, other control systems, and all other equipment at the factory; and the exemption of liability also makes it clear that the losses caused by battery attenuation or external grid failures during charging are not compensated Provide diversified exclusive additional insurance protection for new energy vehicles, and provide liability compensation through 13 specific risks such as new power grid fault insurance and self-use charging pile loss insurance, so as to improve the risk protection of new energy vehicles.

Car companies will become important players in the auto insurance service chain

Liu Xinqi judged that it is expected that the benchmark premium of new energy vehicles under the "Provisions" will decrease slightly compared with the benchmark premium of the current comprehensive reform, and the specific insurance liability of new energy vehicles will increase, so the implementation of the new regulations will have a slight negative impact on the premiums and profits of property insurance companies, but the overall impact is limited. Considering that the current loss rate of new energy vehicles in the industry is generally higher than that of traditional fuel vehicles, if the profitability space of new energy vehicles is relatively small, leading insurance companies that expect more advantageous rates will benefit more. On the one hand, the dilution effect of fixed fees of large insurance companies is remarkable, on the other hand, the proportion of direct control channels of large insurance companies is higher, and the handling fee is relatively low.

According to the sales, ownership, number of underwriting, and average premium of new energy vehicles (yuan), the premium scale of new energy vehicle insurance in the next ten years is predicted. Ge Yuxiang expects that by 2025, the sales volume of new energy vehicles will exceed 10 million to 10.46 million units, the number of ownership will reach 35.65 million vehicles, and the average premium of vehicles will remain relatively stable, and it is expected to reach 34.8 billion yuan in 2021, accounting for about 4.2% of the total premium of automobile insurance; the premium scale is expected to reach 154.3 billion yuan in 2025, and the growth rate will be further improved, accounting for about 15.7% of the total premium of automobile insurance; the premium scale is expected to reach 1279 billion yuan in 2030. It accounts for about 31.3% of the total motor insurance premium.

For the market competition pattern, Ge Yuxiang has a similar view. 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.

It is worth mentioning that the report of iResearch Consulting pointed out that the traditional car insurance business model is based on channels as the core, and the phenomenon of product homogenization is serious, although in the context of comprehensive reform of car 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 maximized, under the premise of data security compliance, the driving behavior, mileage, and length of time used by car owners will become an important basis for car insurance pricing, so as to provide owners with personalized car insurance products. Based on sensor data and artificial intelligence algorithm analysis, smart cars can effectively intervene in dangerous driving behaviors, thereby reducing the incidence of accidents and controlling the loss rate of car insurance. 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, auto companies will become important players and occupy the leading role in auto insurance operations.