WEILAI Auto set up an insurance brokerage company and car companies entered the market to "grab business"

According to the Tianyancha App, Weilai Insurance Brokerage Co., Ltd. was established recently with a registered capital of 50 million yuan, and its business scope includes insurance brokerage business, insurance agency business, insurance concurrently operating agency business, and insurance valuation business. Shareholder information shows that the company is wholly owned by NIO Holdings Limited.

Weilai sword refers to the first insurance brokerage license in China?

At present, NIO Insurance Brokers has only registered with the ministry of industry and commerce, but it does not prevent it from becoming the first new energy vehicle company in China to set up an insurance brokerage company.

Judging from the industrial and commercial registration information, whether it is from the high initial registered capital, the location of the place of registration or the legal representative, it is enough to show that WEIlai attaches great importance to this insurance brokerage company.

First, NIO Insurance Brokers is based in its China headquarters in Hefei. Secondly, its legal representative, executive director and general manager is Qu Yu, vice president of finance of NIO, who is currently mainly responsible for the financial control and management of NIO, and directly reports to Li Bin, founder, chairman and CEO of NIO.

On December 27, 2021, the China Insurance Industry Association New Energy Vehicle Commercial Insurance Exclusive Clauses (Trial) (hereinafter referred to as the "Exclusive Clauses") was officially launched, clarifying that new energy vehicles no longer use traditional commercial auto insurance clauses, but have exclusive insurance products. Subsequently, the premium of some models increased. At that time, Weilai had specifically stated that it was "evaluating the possibility of establishing an exclusive insurance product for Weilai Automobile".

Prior to this, NIO has initially entered the insurance field in the form of additional services, providing NIO car owners with a service package of worry-free and worry-free insurance, covering insurance, maintenance and other services. It is understood that insurance worry-free is composed of two parts: optional insurance (basic insurance + additional insurance) and WEILAI exclusive services, and the basic insurance of Weilai cooperative insurance companies can purchase exclusive services (including scratch paint repair, basic maintenance, maintenance and transportation services, maintenance and delivery services, door-to-door tire repair services, etc.).

From the pricing point of view, the price of the service package is an exclusive service of insurance cost + 1680 yuan / year, which is applicable to the new purchase and renewal of all models on sale, and the insurance cost is related to the model model, the owner's area, the violation record, the past insurance situation and other factors.

Tesla CEO Elon Musk also tweeted that Tesla (NASDAQ:TSLA) hopes to launch its car insurance product in Texas last October and potentially expand the business to New York in 2022.

Musk said that Tesla plans to launch a real UBI car insurance designed according to real time insurance, that is, a new car insurance product designed according to the use time, mileage, driver habits and other information of the vehicle, and giving personalized pricing for different owners.

According to its third quarter earnings briefing, insurance will become one of Tesla's main products, and its business value will account for 30% to 40% of the value of the vehicle business.

Car owner data hidden behind the insurance market

According to the Data Association of China Automobile Association, the sales of new energy vehicles in mainland China will reach 3.521 million units in 2021, an increase of 1.6 times year-on-year, ranking first in the world for 7 consecutive years, and it is expected that the sales of new energy vehicles will reach 5 million units in 2022, an increase of 42% year-on-year, and the market share is expected to exceed 18%.

In fact, with the surge in penetration of new energy vehicles, new energy vehicle insurance is becoming an important track in the auto insurance industry.

According to the data, in the first half of last year alone, PICC Property & Casualty Insurance's new energy vehicle premium income was 4.03 billion yuan, an increase of 60% year-on-year. According to the forecast of the Banking and Insurance Regulatory Commission, by 2035, the annual premium of new energy vehicle insurance in the whole industry is expected to reach about 200 billion yuan.

What are the profit prospects of car companies involved in the new energy auto insurance business?

Some media have estimated that, taking Tesla as an example, if its car insurance model can be smoothly promoted, the loss rate of its car insurance business is expected to be reduced to 50%, the expense rate is 10%, and the operating profit margin can reach 40%, which is 5 times its current overall operating profit margin.

Shenwan Hongyuan Securities analyst Ge Yuxiang also said that car companies have obvious advantages in the new energy vehicle insurance market, including new energy vehicle companies can simplify the new energy vehicle claim process, and can design innovative car insurance products that match car risk and claims.

At the same time, for car companies, new energy car insurance is optimistic, in addition to the huge market potential, but also because car insurance is the entrance of auto companies directly linking C-end users, which can not only open up the whole life cycle of car owners, but also cultivate new business models and growth space. Compared with the UBI car insurance launched by some insurance companies, the ability to obtain data is limited, and car companies can obtain car owner data that insurance companies cannot reach, thus building a commercial closed loop.

iResearch pointed out in the "White Paper on the Ecological Co-construction of China's New Energy Vehicle Insurance" that auto insurance is the first service product that consumers come into contact with when buying a car.

The white paper shows that car insurance has just-needed attributes and stickiness, and is the first link in the service chain, thus becoming the entrance for car companies to serve car owners. Under the background 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. In the future, vehicle delivery is only the starting point for car companies to create value, and with car insurance as the service starting point, car companies can develop more service systems such as after-car ecology and owner rights.

Usually, the profit margin of the automotive after-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.

What hurdles do car companies need to cross?

Although car companies set up new energy vehicle insurance, which has certain advantages over traditional insurance companies, there are still many "roadblocks".

According to China Bancassurance data, from 2016 to the first half of 2020, the overall insurance frequency of new energy vehicles was 3.6% higher than that of non-new energy vehicles, and the insurance rate of household new energy vehicles was even higher than that of non-new energy vehicles by 9.3%.

According to the data of Shenwan Hongyuan Report, the current loss rate of new energy vehicle insurance is close to 85% on average, and the industry is facing greater underwriting loss pressure.

Since the official launch of new energy vehicle insurance, some new energy vehicle insurance has increased significantly.

In this regard, Chongqing insurance industry insiders said that the insurance rate of new energy vehicles is relatively high, not only for operating vehicles such as online ride-hailing cars, but also for private cars. In particular, the owners of fuel vehicles that have just been converted to new energy vehicles have accidents from time to time due to driving habits, handling performance and other reasons. According to the situation, the insurance rate of this part of the owners is much higher than that of ordinary fuel vehicle owners.

At the same time, new energy vehicles are still emerging industries, and the insurance compensation rate of new energy vehicles is also high. Its power system and risk factors are not the same as those of traditional fuel vehicles, and the surveyors lack experience in determining the loss of accident vehicles, and it is difficult to control maintenance costs. At the same time, the amount of new energy vehicle underwriting claim data held by small and medium-sized insurance companies is limited, and the calculation and pricing of risk premiums is also a problem.

Cui Shudong, secretary general of the Association, once 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 uneconomical and not conducive to promotion. Therefore, it is recommended that car companies establish their own insurance varieties, the industry should have more accurate insurance calculations, and the state should also support reasonable subsidies for insurance costs.

In this regard, the insurance industry said in an interview with the upstream news reporter that car companies involved in insurance, license acquisition is only a "stepping stone", but also need to set up regional branches to meet the conditions of localization operation, the establishment of service networks, the construction of systems in order to smoothly achieve business expansion.

Auto insurance has the characteristics of localization, and the nationwide offline service network is its tentacles to ensure user service. This requires car companies to invest a lot of time and capital cost support, and insufficient preparation is likely to affect the user's service experience.

At the same time, in order to realize the development of car insurance business on the car machine and mobile terminal, car companies must have a mature online system, with quotation, payment, billing, claim settlement, management and other functions, and at the same time achieve in-depth docking with the core system of quotation and underwriting of insurance companies. At present, only a few practitioners in the country have such capabilities.

Upstream journalist Yan Wei