The insurance industry has attracted "new forces to build cars" Weilai Insurance Brokers was officially established this month

Reporter Leng Cuihua

Another new energy vehicle company officially laid out its insurance business. The reporter saw in Tianyan that Weilai Insurance Brokerage Co., Ltd. was established on January 19, and the company is 100% controlled by Weilai Holdings Co., Ltd. So far, Tesla, Xiaopeng and Weilai, new energy vehicle companies in the mainland, have set up their wholly-owned insurance intermediary companies.

Industry insiders believe that with the continuous rise in the production and sales of new energy vehicles, new energy vehicle insurance will be the most important incremental source of the automobile insurance industry, and automobile manufacturers have laid out the insurance industry, in addition to the prospects of the new energy vehicle insurance market, it is also an important starting point for them to provide full-life cycle services for car owners.

Incoming insurance intermediaries

According to public information, at present, Tesla and Nio have set up wholly-owned insurance brokerage companies, and Xiaopeng has set up auto insurance agencies, essentially, through insurance intermediaries involved in insurance business.

The relevant person in charge of China Re Property & Casualty Insurance told the "Securities Daily" reporter that at present, the new forces of car manufacturing are actively laying out insurance business, one is the needs of its main business, which can better meet the personalized needs of car owners; the other is that it can expand new business models, achieve asset-light operation through insurance brokerage business, and earn stable profits.

Zhang Lei, CEO of The Car Group, told the Securities Daily reporter that new energy car insurance has become the "golden line" for car companies to connect car owners, and with car insurance as the entrance, car companies can not only open up the whole life cycle of car owners, but also cultivate new business models and growth space. In the past, there was a problem of user information competition between car companies and offline dealers, left and right hand fighting, and now the new energy vehicle direct operation model and agent stores are becoming a new trend, in this context, the ordering, delivery, insurance and other links return to the hands of car companies, user car cycle data feed back to car companies, changing the traditional 4S store-centric service model. Car companies and users directly connect and communicate, through the owner service ecology to enhance user stickiness and brand loyalty, car companies from simple automobile manufacturing to manufacturing, sales, financial services, claims maintenance and other one-stop service providers, car insurance just need, high frequency of claims, for car companies to create a car owner service ecology provides an important starting point.

At present, the mainland new energy automobile industry is developing rapidly. According to public data, sales of new energy vehicles reached 3.521 million units in 2021, an increase of 1.6 times year-on-year. From the perspective of ownership, the number of new energy vehicles in mainland China will reach 7.84 million in 2021, accounting for 2.6% of the total number of vehicles in mainland China. At the same time, according to the "New Energy Vehicle Industry Development Plan (2021-2035)", by 2025, the sales volume of new energy vehicles will reach about 20% of the total sales of new vehicles. Industry insiders believe that the 2025 target may be achieved ahead of schedule, and the resulting growth rate of new energy vehicle insurance will also exceed expectations. According to the scrapping period of traditional fuel vehicles in stock, China Reinsurance insurance is expected to increase the annual premium of new energy vehicle insurance in the whole industry to about 200 billion yuan by 2035.

The three sides seek balance

What kind of changes will the new car-making forces bring to the new energy auto insurance market when they enter the insurance industry? Recently, the rise in new energy vehicle insurance premiums has become a hot topic in society. In the case of the general development trend, how to balance the interests of car companies, insurance companies and consumers in the new energy vehicle insurance business has become a new pursuit.

On December 27 last year, new energy exclusive car insurance was officially launched nationwide. On the same day, the Shanghai Insurance Exchange listed the first batch of new energy vehicle insurance products of 12 property insurance companies, including PICC Property & Casualty, Ping An Property & Casualty, and CPIC Property & Casualty. Subsequently, some consumers reported a sharp increase in new energy vehicle insurance premiums.

On December 29 last year, Xiaopeng issued a note saying that according to the national premium situation feedback from various insurance companies the previous day, the average increase of Xiaopeng models across the line ranged from 2.9% to 18.2%. Industry insiders believe that the protection of new energy exclusive car insurance is more targeted than traditional car insurance, and the protection responsibility is more comprehensive, which is the core reason for the rise in premiums. From the perspective of specific vehicles, premiums have fluctuated. First of all, the benchmark premium of new energy models below 250,000 yuan has only dropped and not risen; secondly, the premium of some high-end electric vehicles has indeed risen significantly. Since the final premium of car insurance is also affected by factors such as traffic violation records and the number of insurance accidents, consumers also need to refer to the final quotation given by insurance companies.

While some consumers are complaining about the rise in premiums, insurance companies seem to be "headaches" for the high loss rate of new energy vehicle insurance. Ge Yuxiang, an analyst at Shenwan Hongyuan Securities, said that the current 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, the comprehensive cost ratio of new energy vehicle insurance exceeds 110%, and the head company basically maintains underwriting breakeven by virtue of its natural advantages in pricing, customer reserves and manufacturer cooperation capabilities.

The relevant person in charge of China Re Property & Casualty Insurance told reporters that after the comprehensive analysis of various factors, after the listing of new energy exclusive car insurance, the loss rate of most new energy vehicles may also rise, and it is necessary to resolve the contradiction between high growth and high compensation of new energy vehicle insurance premiums from many aspects.

Cui Dongshu, secretary general of the Passenger Car Market Information Joint Association, recently wrote that the introduction of new energy vehicle insurance is a good thing, but the cost increase is high, and the fuel money saved by new energy vehicles may have to pay insurance, resulting in new energy vehicles that seem to be not cost-effective, forming a phenomenon that cannot be afforded, which is not conducive to the promotion of new energy vehicles. Therefore, car companies should establish their own insurance varieties, the industry should have more accurate insurance calculations, and the state should also support reasonable subsidies for insurance costs.

Judging from the current way car companies get involved in insurance, they are all carried out through the establishment of insurance intermediaries. Industry insiders believe that although insurance intermediaries cannot directly underwrite auto risks, insurance intermediaries that are 100% controlled by automakers can obtain different advantages, namely auto risk data and customer data. "Insurance brokerage companies can be deeply involved in the design of insurance products and undertake these policies through cooperative insurance companies." Xu Yuchen, partner of Yuchun Actuarial Consulting, told reporters.

Overall, the new energy auto insurance market will maintain rapid growth, and at the same time, with the extension of product operation time, the cooperation between insurance companies and car companies will be closer, seeking a balance of interests between car companies, insurance companies and consumers.