Recently, another new energy vehicle company has taken substantial steps in the cross-border insurance market.
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.
In August 2020, Tesla established a company of the same nature, which is 100% controlled by Tesla Motors Hong Kong Limited.
Attractive market prospects
2021 is the year of the outbreak of new energy vehicles. Benefiting from the overall sales volume of the automobile market and the eye-catching performance of the new energy vehicle market share, the valuation and profit of the new energy automobile industry chain have both risen.
According to the data, the global sales of generalized new energy passenger cars will reach 9.37 million units in 2021. Global sales of narrow new energy vehicles, including plug-in hybrid, pure electric, and fuel cells, reached 6.23 million units, an increase of 118% year-on-year. China's world share of new energy passenger cars is 53%, and it will reach 60% in the fourth quarter of 2021.
For the traditional automotive industry with a history of hundreds of years, the development potential of new energy vehicles from the birth of new energy vehicles to the acceleration of expansion is only a few years, and the development potential is self-evident. The growing new energy vehicle market has also accelerated the development of the new energy vehicle insurance market.
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. The data estimates that in 2035, the annual premium of new energy vehicle insurance will increase to about 200 billion yuan.
Industry insiders generally believe that compared with insurance companies, new energy vehicle companies have obvious advantages in vehicle travel data, and it is easier to monitor the risk of users' car behavior. The establishment of insurance institutions by car companies can save risk management costs and intermediary costs; at the same time, they can use insurance to enhance their connection with users, expand more comprehensive services, and realize service closed-loop.
Staggering premiums
In the face of the "big cake" of new energy vehicle insurance, new energy vehicle companies and traditional automobile companies are competing to pour in. For example, Zhongcheng Insurance, which was founded by GAC Group and others, Shanghai Automobile Group Insurance Sales Company under SAIC Motor Group, and Guangzhou Xiaopeng Automobile Insurance Agency Company under Xiaopeng Automobile, etc. In August 2020, Tesla also established an insurance brokerage company in Shanghai.
The auto companies with this intention are far more than that, and the new energy auto insurance market is destined to not be calm in 2022. However, according to the Financial Times reporter, the layout of new energy car insurance not only stems from the attraction of a huge market, but also from the doubts of new energy car owners about car insurance premiums.
At the end of 2021, the exclusive clause of new energy vehicle insurance will be officially implemented. A Weilai car owner in Beijing complained to the Financial Times reporter that her car premium soared from more than 5,000 yuan last year to 7,900 yuan, and the soaring price made her depressed.
It is not only The owners of Weilai whose premiums have increased, but Tesla's increase is also very obvious. At the end of December 2021, a Tesla owner posted a screenshot on social media and said that car insurance rose by more than 6,000 yuan compared with a few days ago, an increase of up as much as 80%. Discussions about new energy vehicle insurance premiums have also become lively.
Where is the way out?
Cui Dongshu, secretary general of the National Passenger Car Market Information Joint Association, responded to this: "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 psychological concerns among some consumers." ”
Can the price of new energy vehicle insurance be reduced? Can Tesla's UBI car insurance in foreign countries become a "panacea" for bailouts?
UBI car insurance focuses on usage, pays attention to individual differences, and pays attention to differentiated treatment. Different drivers, different driving hours, different driving habits, different mileage, the corresponding risk probability is different, therefore, the premium should also be different. By accurately defining the customer base, Tesla's UBI car insurance premiums will drop by 20% to 30%.
It must be emphasized that although consumers complain that the price of new energy vehicle insurance has risen too much, the insurance coverage has also achieved a huge breakthrough, and the "three electricities" (battery and energy storage system, motor and drive system, and other control systems) are included in the coverage of vehicle damage insurance. At the same time, volkswagen's concern about the risk of spontaneous combustion of vehicles has also been included in the protection clause. The new energy vehicle insurance breaks the situation to ensure the pain points, so that the pace of reshaping the new energy industry pattern is accelerating, and the relationship between people, vehicles and factories is being reconstructed. In the traditional model, car companies often only undertake automobile production and manufacturing tasks, delivery, maintenance, value-added services are undertaken by dealers, and the connection between car companies and users is weak. Under the existing model, car companies are penetrating the entire chain of automotive industry value and becoming the main provider of integrated services for consumer cars.
It is worth mentioning that the new energy vehicle insurance will adjust the surcharge rate from the previous 25% to 15%. According to the basic principles of property insurance pricing, part of the surcharge rate is to prevent the impact of loss fluctuations on the financial stability of the insurance company, and the other part is mainly to make up for the insurance company's management expenses, personnel salaries, commissions and taxes, and maintain the insurance company's moderate profits.
According to the Financial Times reporter, for insurance companies, according to the current level of car insurance operations in the mainland, it is difficult to control the additional expense ratio at 15%, which means that some insurance companies may have underwriting losses in this business. But for new energy vehicle owners, they hope that premiums can vary from person to person, rather than being "averaged".
A person from a property insurance company in Beijing told reporters that in the past, the underwriting losses of new energy vehicles could be compensated by the fuel vehicle business to a certain extent, but after the comprehensive reform of automobile insurance, the fuel vehicle insurance business also faced greater operating pressure. While consumers generally benefit, the comprehensive cost ratio of motor insurance in individual regions exceeds 100%, and the auto insurance industry is facing the problem of sustainable development.
Li Wenzhong, deputy director of the Insurance Department of the Capital University of Economics and Business, said that in this case, it is also a helpless choice for the new energy car insurance premium to rise to a certain extent. Of course, insurance companies also need to increase the investment and application of science and technology, strengthen operation and management, reduce costs, control prices, and appropriately balance the interests of both sides.
Cui Dongshu believes that the premium of new energy vehicle insurance is higher than that of fuel vehicles of the same level, mainly because the insurance historical data of new energy vehicles has accumulated less, resulting in large fluctuations in historical data. The premium is calculated based on the historical data of some high-fault models in the previous period, ignoring the reasonable costs and protection after the model improvement. Therefore, he suggested that the insurance industry should use more recent data information to analyze the new energy vehicle insurance business.
In 2022, new energy vehicles will continue to maintain a strong momentum of development. In January, BYD sold 93,200 new energy vehicles, up 361.73% year-on-year; Xiaopeng Automobile delivered 12,900 units, an increase of 115% year-on-year; Ideal Automobile delivered 12,300 Ideal ONE units, an increase of 128.1% year-on-year; ANDC achieved sales of 9,652 units, an increase of 33.6% year-on-year.
In the face of such a growth rate, it is necessary to solve the situation that the premium of new energy vehicles is not cost-effective, and it is necessary for many parties to work together. Insurance companies should increase investment in science and technology and strengthen operation and management, and strive to reduce operating costs; car companies need to reduce the risk profile of new energy vehicles by strengthening research and development.