New energy exclusive car insurance on the line New energy car companies have successively entered the market to sell insurance

Economic Observer reporters Wang Qing Tesla, Weilai, etc. have sold insurance... The market space after the launch of new energy exclusive car insurance is attracting new energy vehicle companies to enter the market.

"At present, the increase in the premium of new energy vehicles is not as exaggerated as it is said on the Internet, for example, some models will increase their premiums higher than other models due to battery upgrades, but the overall situation is OK." In mid-February, when the Economic Observer reporter visited a Tesla store in Shanghai, a salesman talked about the car insurance premiums.

At this time, nearly two months after the launch of domestic new energy exclusive car insurance, after the introduction of exclusive insurance, it once triggered the complaint of new energy car owners, "the fuel cost of the province has paid the premium".

The trillion-dollar market space for new energy vehicle insurance is attracting more and more car company participants. Following Tesla and Xiaopeng Motors' entry into the insurance industry, NIO officially established an insurance brokerage company at the end of January.

It is worth noting that although the trillion yuan market for new energy vehicle insurance has broad prospects and can be called a just-needed market, for entrants, they are facing many challenges such as high loss ratios and the dilemma of "high insurance and low loss".

The era of new energy exclusive car insurance has begun

On December 14, 2021, the Exclusive Clauses of the China Insurance Industry Association for Commercial Insurance for New Energy Vehicles (Trial Implementation) (hereinafter referred to as the "Clauses") were issued, stipulating that all new energy vehicles must be insured with new energy vehicle insurance, and adding a lot of protection content for new energy vehicles to make them more suitable for the use scenarios of new energy vehicles.

Specifically, new energy vehicle insurance includes three main insurances and 13 additional insurances of automobile loss insurance, third-party liability insurance, and vehicle personnel liability insurance, and the insured can choose all or part of the insurance.

In terms of insurance liability, captive insurance not only provides protection for the "three electricity" (battery, motor and electronic control) system, but also comprehensively covers the use scenarios of new energy vehicles driving, parking, charging and operation. In terms of diversified insurance scenarios, captive insurance covers both the loss of the car, the loss of auxiliary equipment such as charging piles, and the property damage and personal injury that may be caused by the equipment itself.

On December 27, 2021, the Shanghai Insurance Exchange officially launched the new energy auto insurance trading platform and listed the new energy exclusive auto insurance products of 12 insurance companies, including Chinese Insurance, Sunshine Property & Casualty Insurance, China Insurance, Chinese Life, which also means that the era of new energy exclusive auto insurance has officially begun.

However, after the launch of new energy exclusive car insurance, it was complained by many new energy car owners on social platforms, and the car insurance premiums they purchased increased, "the fuel costs saved have paid premiums".

In this regard, some people in the insurance industry analyzed that this is mainly due to the expansion of the coverage of new energy vehicle insurance, compared with traditional oil vehicle insurance, new energy vehicle insurance has a lot of special protection. Secondly, due to the technical and quality problems of new energy vehicles, the current loss rate of new energy vehicle insurance is close to 85%, which is significantly higher than that of fuel vehicles, and the insurance company pays under pressure, which will naturally be transmitted to users.

It is reported that commercial auto insurance premiums are equal to the benchmark premium multiplied by the rate adjustment factor. According to the "Explanation on the Adjustment of the Benchmark Pure Risk Premium Table for Exclusive Products of New Energy Vehicle Commercial Insurance" issued by the China Association of Actuaries at the end of December 2021, the benchmark premiums of the new energy vehicle three insurance and the car damage insurance will drop by about 0.8%; while the rate adjustment coefficient is composed of no indemnity preferential coefficient, traffic violation coefficient and autonomous pricing coefficient, of which the independent pricing coefficient is the most complex, and the insurance company will set different coefficients according to its own profit and loss and different vehicle risk conditions.

The above-mentioned Tesla store sales staff told reporters that the 80% increase in premiums should be a very rare situation and cannot represent the situation of other new energy vehicles on the market. "For example, we have a car's battery upgraded, coupled with the comprehensive reference to the insurance green situation, the premium has increased normally, consumers still need to look at it rationally."

Cui Dongshu, secretary general of the All-China Passenger Transport Association, also issued a document saying, "The introduction of new energy vehicle insurance is a very good thing, but the cost increase is high, and the fuel money saved by using new energy vehicles may have to be used to pay insurance, resulting in new energy vehicles that seem to be not cost-effective, forming a phenomenon of 'affordable to buy', 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. ”

According to the sales, ownership, underwriting volume and average premium of new energy vehicles, Shenwan Hongyuan Securities expects that by 2025, the domestic new energy vehicle insurance premium scale will reach 154.3 billion yuan, accounting for about 15.7% of the total premium ratio of automobile insurance; it is expected that the new energy vehicle insurance premium scale will reach 1279 billion yuan in 2030, accounting for about 31.3% of the total premium ratio of automobile insurance.

Car companies enter the game

The trillion yuan market of new energy vehicle insurance was officially opened, which also attracted capital from all parties to accelerate its entry.

Less than a month after the launch of new energy exclusive car insurance, NIO officially established an insurance brokerage company. According to industrial and commercial information, NIO Insurance Brokers Co., Ltd. was established on January 19 with a registered capital of 50 million yuan and wholly owned by NIO Holdings Co., Ltd. The legal representative, Qu Yu, serves as an executive director and general manager of the company at the same time. In addition, Qu Yu also served as vice president of finance at NIO Automobile, directly under the leadership of Li Bin, chairman of NIO Motor.

The business scope of NIO Insurance Brokerage Company covers insurance brokerage business, insurance agency business, and insurance concurrently operating agency business. Carry out captive insurance agency business within the scope of the authorization of the insurance company; insurance valuation business.

It is worth mentioning that at present, the insurance brokerage company of Weilai is only registered in the industrial and commercial department, and if it wants to obtain an insurance brokerage license, it also needs to apply to the Banking and Insurance Regulatory Commission for approval.

Before the establishment of the insurance brokerage company, WEILAI had specially opened two value-added service items of insurance worry-free and after-sales worry-free, it is reported that users can choose to buy when buying a car, and the service is underwritten by the insurance company cooperated by WEIlai.

For Weilai's entry into the insurance industry, Jiang Han, a senior researcher at Pangu Think Tank, said in an interview with reporters that there are three main aspects to consider, first, the establishment of insurance companies by new energy automobile companies has almost become a general trend of current development. Secondly, from the perspective of the growth history of the automobile market, because car companies gradually mature in the stage of producing and manufacturing automobiles, they will find that finance can effectively promote the circulation of the automobile market and let the automobile market enter a more effective state, so that car companies will inevitably begin to carry out large-scale layout in the automobile financial market after developing to a certain stage. "From the perspective of the long-term development trend of new energy vehicle companies, Weilai is an inevitable choice to do insurance brokerage, but it is also the key to further enhance its market competitiveness, after all, for the current new energy automobile enterprises, in the face of the problem of subsidy decline, if you want to make yourself develop better in the market and get more market competitiveness, you must continue to exert efforts in various fields, and even form an effective industrial ecology." Jiang Han believes that in terms of charging pain points, Weilai Automobile has begun to make large-scale efforts to replace the power market, and insurance in the financial field has become an inevitable move.

Before Weilai entered the game, new energy vehicle companies have laid out new energy vehicle insurance tracks early. For example, Xiaopeng Automobile has cooperated with a number of traditional insurance companies before, and then established its own insurance agency co., LTD. in July 2018 to carry out auto insurance agency business.

Tesla, as a leading enterprise of new energy vehicle companies, cooperated with insurance companies in 2017 to launch auto insurance services to users. In April 2019, Tesla obtained an insurance brokerage license through the acquisition of Markle Company of the United States; established an insurance brokerage company in Shanghai in August 2020; and in October 2021, Tesla CEO Musk announced the launch of ABI's new car insurance product (insurance based on usage, based on the owner's individual driving data pricing rather than the large number law that traditional insurance relies on).

In addition, the traditional car company Geely Automobile chose to invest in Hezhong Property Insurance, GAC Group established Zhongcheng Automobile Insurance, and SAIC Motor Group established Shanghai Automotive Group Insurance Sales Company.

For entrants, there will be many challenges such as high loss rates and the dilemma of "high insurance and low losses".

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%.

At present, the loss ratio of new energy vehicle insurance is close to 85% on average, and the industry is facing greater underwriting loss pressure. Gu Yue, chairman of CPIC Property & Casualty Insurance, once said that the proportion of CPIC's new energy vehicle insurance business is relatively high in the industry, but the overall compensation situation of new energy vehicle insurance is not ideal, and the next step will be to better control the new energy vehicle market according to the new new new energy vehicle clause rate of the Banking and Insurance Regulatory Commission.

In addition, the layout of new energy vehicle insurance by car companies also faces the challenge of service network establishment and management. Zhang Lei, CEO of Auto Technology, believes that the current digital process of mainland auto insurance is relatively shallow, in order to provide users with high-quality claims, maintenance, and car owner services, car companies are required to cooperate with a large number of offline service outlets or build a huge service network system, which will require a lot of time and capital costs. In addition, it is also difficult to build a mature online system, "under normal circumstances, there are differences in the interface and underwriting rules of different companies in different provinces and cities, and it is difficult to achieve docking with a large number of systems in a short period of time."