Traditional car insurance has encountered the impact of new energy, and reform is imperative, but there may be a long way to go if you want to make money by selling car insurance.
2021 is the year of the outbreak of new energy vehicles. The major new energy vehicle manufacturers have shown their magic and jointly delivered more than expected results.
According to the data of the Federation of Passenger Vehicles, the cumulative sales volume of all passenger cars in 2021 reached 20.146 million units, of which the sales volume of new energy vehicles reached 2.99 million units, a sharp increase of 1.69 times year-on-year. The penetration rate of new energy vehicles has reached 14.8%, and the trend of fire has been basically established.
Source: The official website of the Association of Passengers
The sharp increase in sales means that consumers' criticism of new energy vehicles compared with traditional fuel vehicles is decreasing, and with the development of battery technology and the improvement of social support, the mileage anxiety and supporting anxiety of new energy vehicles have gradually eased.
However, recently, new energy vehicle insurance has become a new "roadblock", and the high premium has worried many consumers.
At the end of December 2021, a Tesla owner posted a screenshot on social media, saying that car insurance rose by more than 6,000 yuan compared with a few days ago, an increase of up as much as 80%. This news quickly fermented, rushed to the hot search, and the discussion on the internet about the premium of new energy vehicles became more and more intense.
Cui Dongshu, secretary general of the Association, commented on this matter in "New Energy Vehicles Cannot Afford to Afford".
He said: This increased premium of 6,000 yuan, calculated down to 500 yuan per month, should be able to run nearly 1,000 kilometers, basically covering the fuel cost of fuel vehicles, greatly weakening the advantages of electric vehicles and traditional fuel vehicles, resulting in some consumers' consumer psychological concerns.
In order to solve the above problems, new energy vehicle insurance should use closer data information and shorter-term data to extend the analysis, so as to accurately insure and reduce premiums. As a representative of the new car-making forces, Nio (NIO.US) took the lead in sounding the clarion call to march towards insurance.
According to Aiqicha, on January 19, 2022, NIO Insurance Brokers Co., Ltd. was established in Hefei with a registered capital of 50 million yuan. The business scope includes insurance brokerage business, insurance agency business and insurance concurrently operating agency business.
Source: Aiqicha
Prior to this, there were not a few car companies involved in the insurance industry, including both traditional car companies and new energy car companies.
For example, the 601238. SH) and other initiators of the establishment of Zhongcheng Insurance, SAIC Motor Group's Shanghai Automotive Group Insurance Sales Company, Xiaopeng Automobile's Guangzhou Xiaopeng Automobile Insurance Agency Company, etc. In August 2020, Tesla also established an insurance brokerage company in Shanghai.
In fact, WEILAI has been "involved" in the insurance business for a long time, and it can be clearly seen in Weilai's APP that "service is worry-free" or "insurance worry-free" products.
These two products have entered the scope of insurance, but the insurance business in the product still belongs to the cooperative insurance company. Different from the "cold" traditional car insurance, WEILAI's main direction is "warm" service.
Taking NIO's Insurance Worry-free (2021 Edition) as an example, it is mainly divided into two main parts, the first part is pure car insurance, and the second part is value-added services (scratch paint, basic maintenance, driving, etc.).
Car insurance is the purchase of car insurance within the scope of insurance companies cooperating with NIO, including compulsory traffic insurance, third-party liability insurance (1 million cases) and car damage insurance. Similar to insurance worry-free, the car insurance content is selected, and the value-added service content is similar to that of insurance worry-free.
Source: NIO APP
Since it has achieved in-depth cooperation with specific insurance companies and has already had several years of successful operation experience, why does WEILAI personally go down and enter the insurance industry?
As the number one player in the world's new energy vehicles, Tesla's (TSLA.US) insurance layout is worth thinking about and learning from Weilai.
The UBI that was brought on fire by Tesla
In October 2021, Tesla launched its own UBI (Usage Based Insurance) car insurance product, officially announcing its entry into the insurance industry.
In 2021, tesla's third quarter performance briefing, Musk has confidently said: "Insurance will become Tesla's main product, and the value of insurance business will account for 30% to 40% of the value of the vehicle business." ”
From Musk's statement, we can see his expectations for new business, so what is the difference between Tesla's newly launched UBI car insurance and traditional car insurance in the past?
Traditional car insurance relies on the law of large numbers, according to the value and service life of the car, combined with the insurance data of previous years and actuarially calculated. In fact, this long-standing "one-size-fits-all" model has many irrationalities.
Whether it is life insurance or car insurance, as long as it is insurance, the core is that the insurance company makes financial transfers for the risks that may occur in the future.
In layman's terms, under the premise that the value of the insured target is determined, the greater the probability of the occurrence of risk of the insured target, the greater the mathematical expectation of the insurance company's future claim amount, and the more expensive the premium that the insurance company needs to collect; on the contrary, if the probability of the occurrence of the risk of the insured target is small, then the required premium will naturally drop a lot.
I would like to ask, is the same model, the same service life, the corresponding risk of different drivers the same? The answer is clearly no, the risk to the car itself is certain (for quality reasons) and the risk of real uncertainty occurs during the ride.
That is, the driver's actions are the most direct source of risk. Different operations bring different risks, but different risks correspond to the same premium price.
Such a unified calculation is bound to affect a part of the "low-risk" users, and eventually there may be a phenomenon of "bad currency expelling good money", the riskier users will make cheaper, and the less risky users' premiums will be pulled up.
UBI Car Insurance focuses on use (use), pays attention to individual differences, and pays attention to differentiated treatment. For example, if the driving time period is different, the driving habits are different, and the mileage is different, the corresponding risk probability is different, so the premium should also be different.
UBI car insurance can take the driving data of the car itself as an important assessment standard, and then collect the user's usual use data for detailed analysis, so as to achieve pricing standards directly for a certain model or a certain type of model.
It is precisely because of the precise definition of customer groups that Musk said that the premium of Tesla UBI car insurance will drop by 20-30% in the future. This is a revolutionary move to subvert the existing auto insurance industry, does the country have the soil for auto insurance reform?
Policy advantages
On December 27, 2021, the "Exclusive Clauses for Commercial Insurance for New Energy Vehicles of the China Insurance Industry Association (Trial)" was officially launched, which also marks that the national policy has paid attention to the problem of new energy vehicle insurance and is gradually improving this emerging field.
On the same day, in order to actively serve the national strategic goal of "carbon peaking and carbon neutrality", the Shanghai Insurance Exchange officially launched the new energy vehicle insurance trading platform, and the first batch of new energy vehicle exclusive insurance products of 12 property insurance companies such as PICC Property & Casualty, Ping An Property & Casualty, and CPIC Property & Casualty were listed to provide support for the landing of new energy vehicle exclusive insurance products.
The launch of the new energy auto insurance trading platform is a useful practice and exploration of the reform of the auto insurance trading market model, and also a major innovation in the insurance industry in the new energy auto insurance service model.
In the Guiding Opinions on the Implementation of the Comprehensive Reform of Automobile Insurance (Draft for Solicitation of Comments) issued by the Banking and Insurance Regulatory Commission, it emphasizes the need to enrich commercial automobile insurance products in the future. Among them, it is mentioned that we should explore the development of innovative products such as motor vehicle mileage insurance (UBI).
The CBIRC's statement means that when the time comes, UBI will improve the existing insurance products and improve the efficiency of the whole society. The front end provides insurance consumers with insurance application, inquiry and other services to reduce transaction costs and enhance consumer satisfaction and sense of gain; the back end provides corresponding supporting services through docking the big data platform.
It is foreseeable that the state will have certain support for new energy vehicle insurance to prevent high premiums of new energy vehicle insurance and promote the faster and better development of the new energy vehicle industry.
With the endorsement of the policy and the implementation of the environment for the reform of automobile insurance, what are the advantages of Weilai?
Advantages of new energy vehicles
In fact, UBI is not a new concept, and there are already related products abroad in the early 2000s. The idea of UBI was good, but at the time it was limited by the accuracy and breadth of data collection, so it was not widely used.
At this stage, intelligent new energy vehicles have natural advantages, which are conducive to data collection and data exchange, and cooperate with the data statistics of Internet car companies to finally achieve more humanized and targeted car insurance products.
The basis of risk can be a variety of ways and multiple dimensions, and even different car companies can develop corresponding algorithms according to their own situation, so as to achieve a car insurance market with thousands of cars and thousands of insurance.
For example, relying on the mileage to distinguish the degree of risk, the lower the mileage means the shorter the driving time, the shorter the road time indicates that the probability of an accident is smaller, and the smaller the risk factor corresponds to the smaller premium.
For example, according to the driving habits (violations / dangerous driving times) to distinguish the degree of risk, not only can the owners with good driving habits enjoy lower premiums, but also can reverse the standardization of the driving habits of the whole society and reduce the frequency of accidents.
Intelligent front-loading sensors and vehicle networking are the premise of WEILAI UBI landing, accurately recording the driver's operating habits, and is an important reference for the risk factor of car insurance.
As a representative of Internet car companies, WEILAI applies the Internet experience to the extreme. Go to the sales showroom of NIO, and the sales staff will emphasize that all the links related to the car can be realized in the NIO APP.
The most important point of Internet consumption is the sense of trust of the brand, and the resulting repurchase and promotion is the source of power for the development of Internet brands, which is also the moat that all Internet brands desperately want to build.
In the direct marketing process of NIO, only car insurance is the part that relies on a third party and is not under its control. If the consumer is insured, then it will be the docking of the consumer and the insurance company, and WEILAI cannot participate in it.
At this stage, the services of insurance companies are uneven, and if consumers are dissatisfied with the insurance claims process, resentment is likely to be added to Weilai.
Therefore, NIO is very motivated to complete the last link of the entire life cycle. In the past, car insurance insurance was heavy price and light service, and in the future, car insurance will become Weilai's after-sales service.
Ideally, consumers only need to dock with NIO, whether it is follow-up value-added services or insurance services, NIO can more comprehensively apply its own service concept, create a closed loop of services, and enhance the consumer experience.
From this point of view, Weilai's entry into car insurance is also the trend of the times. However, despite UBI's advanced philosophy, the road ahead is challenging.
The road ahead is not easy
Although NIO has registered an insurance brokerage company, it is not easy to truly participate in the sales of insurance products and to obtain insurance qualifications and licenses from the Banking and Insurance Regulatory Commission.
Moreover, WEILAI does not have a long period of insurance experience, and there are still many places that need to be accumulated and learned about loss determination, claim settlement and other links, and it is more difficult to run this huge system in the short term.
On the other hand, insurance products need insurance reserves, and for the fledgling Weilai, the capital reserves can be described as stretched.
If the premium is too expensive, although it can reduce the risk of weilai's compensation, it will turn consumers away; if the premium cannot cover the loss risk, it is difficult for the company's related insurance business to be sustainable.
Since the official launch of new energy vehicle insurance, some new energy vehicle insurance has increased significantly, and the above Tesla case is one of them. The main reason is that insurance companies lack original pricing data for new energy vehicles, coupled with high maintenance costs and high accident rates. To avoid risk to insurers, raising benchmark pricing is a relatively safe and conservative approach.
Therefore, even if NIO's UBI can land in the short term, it will be difficult to achieve a significant reduction in its premiums. Only by reserveing a certain amount of operating experience, collecting and analyzing more driving data, and expanding sales to dilute costs can NIO truly launch an idealized UBI car insurance.
No reform can be completed overnight, and NIO has taken a tentative and crucial step. The future may be full of thorns, but related attempts are also an important part of the industry/industry progress.