Recently, according to CNBC, Tesla and GM have entered the auto insurance market. Tesla's insurance business has covered 5 states, including Arizona and Ohio, and is expected to reach 45 states by the end of the year, and Tesla can insure 300,000 cars by 2025. Wedbush analyst Dan Ives said that in the short and medium term, Tesla's insurance business aims to reduce premiums by 30 to 40 percent.
At the end of last year, in the face of the controversy over the rise in premiums after the launch of new energy exclusive car insurance, WEILAI issued a statement saying that it was evaluating the possibility of establishing a WEILAI auto exclusive insurance product. A month later, NIO Established NIO Insurance Brokerage Co., Ltd. to get involved in the insurance business as an insurance intermediary.
Want to establish their own low-premium insurance system supported by data, this year's car companies can be there, something is really!
1
Insurance has become the "favorite" of car companies
Car company entry insurance is not new. Earlier, GAC Group led the establishment of Zhongcheng Automobile Insurance as early as 2011, China FAW also initiated the establishment of Xinan Automobile Insurance in 2012, coupled with the establishment of insurance sales companies by SAIC Motor Group, Geely Automobile Investment Insurance Company, dongfeng, Great Wall, Changan, BYD, BAIC and other traditional car companies have participated in the insurance market to varying degrees.
However, unlike traditional car companies involved in the traditional car insurance business, a new round of car companies represented by new car-making forces has entered the market and focused more on new insurance suitable for new energy intelligent vehicles. In October 2021, Tesla launched its own UBI (Usage Based Insurance) car insurance product, officially announcing its entry into the insurance industry.
At the end of September last year, Tesla's "fully autonomous driving 10.1 beta version" was launched, and it has been bound to launch an insurance calculator. Tesla uses in-car sensors to collect the driver's behavior, including whether to leave the steering wheel with both hands, the number of sharp brakes and sharp turns, whether to maintain a safe distance from the car in front, etc.; then converts the collected data into a safety score between 0 and 100, and the higher score means safer driving habits and less likely to have accidents, so it gets a lower car insurance price.
As we all know, the price of traditional car insurance is calculated by insurance companies based on the pricing of the model, the age of the owner, gender and other information, and can only stipulate a unified price for the group, and cannot identify the differences between different car owners. Tesla's upcoming car insurance is a new exclusive car insurance product designed according to the use time, mileage, driver habits and other information of the vehicle, and gives personalized pricing for different owners.
WEILAI has also previously issued instructions on the exclusive insurance of new energy vehicles, and prompted users to choose service worry-free or insurance worry-free products according to their own car use. This move has been interpreted by many as Weilai or will launch exclusive new energy vehicle insurance services, and the establishment of a new insurance brokerage company may mean that the possibility of Weilai launching captive insurance will further increase.
2
Insurance is the fat meat of the profits of car companies
Indeed, the speed of car companies to lay out car insurance has accelerated, especially after the addition of new energy car companies, the degree of layout has become deeper.
According to the analysis of the relevant person in charge of car technology, after the rise of the new energy direct operation model, the rights of booking, delivery, insurance and so on began to return to car companies, and the just-needed attributes of car insurance are very strong, car companies can establish connections with users from multiple scenarios such as insurance, insurance, renewal, maintenance, and claims, and car companies and users have more contacts and more frequent interactions, and the relationship between the two is more direct and flat. Car insurance has become a super entrance for car companies to control the service of car owners, which is more conducive to reshaping the relationship between car companies and consumers, from sales to user life cycle management, and building a user-centered service closed loop.
With car insurance as the entrance, car companies and user data interconnection can provide users with more front-end, throughout the whole process, better experience of customer service, the construction of a new car ecology with higher user loyalty, led by car companies, from the "sales growth" model to the "ecological co-construction" model.
The purpose of serving customers well is to create more revenue, and it has to be said that car insurance is definitely a piece of profit fat. Peng Zhao, co-founder of Panda Insurance Technology, analyzed that a large part of the new energy vehicle insurance is purchased through social intermediary channels, but with the increase in the ownership of new energy vehicles, especially the direct sales model of new car-making forces, car companies will find that selling insurance is even more cost-effective than selling cars, not only earning insurance commissions, but also controlling the after-sales maintenance services of vehicles to a large extent, and it is time to "recover the lost ground".
Musk has also been blunt that he is very optimistic about the auto insurance business and expects that the future valuation of Tesla Insurance may reach 30% to 40% of the auto business. Based on Tesla's current valuation of $885.6 billion, the ideal valuation of Tesla's insurance business can reach about $300 billion, which is much higher than the valuation of most insurance companies in mainland China.
GM reinstated its old insurance division, GMAC, as on-board in 2020, with an ambitious goal of achieving $6 billion in annual insurance revenue within a decade.
3
Car companies are the "god assist" of car insurance reform
Of course, the profits of the insurance business are attractive, but the goal of car companies is definitely not just to sell insurance, but to launch exclusive car insurance to achieve the subversion of traditional car insurance, both to create revenue for themselves and for the benefit of car owners. In the words of Dan Ives, "Encouraging the purchase of electric vehicles is more important than making a profit." ”
For a long time, customers have generally complained about the price and service level of auto insurance products, especially after the launch of new energy exclusive auto insurance, due to the high zero-to-whole ratio, the high threshold of maintenance technology and the monopoly of new energy car companies on maintenance channels, etc., car insurance premiums have risen significantly, causing consumers to question continuously, directly hitting the enthusiasm for purchase.
At a time when intelligent connected vehicles are becoming more and more popular, the entry of car companies is of great benefit to the optimization of insurance products. For example, car companies can use electric vehicles as test platforms, so that insurance companies can obtain more accurate data to assess risks and control costs.
Tesla Chief Financial Officer Zach Kirkhorn said Tesla sent a lot of information about how to drive, instructing drivers to feedback information, and the result of real-time feedback was "greatly reduced" accident rates. Musk also said that if people drive safely, the cost of insurance will be lower. Tesla Insurance provides information and real-time feedback, encourages people to drive safer, and gives monetary rewards.
GM is also moving quickly, and it is working with U.S. home insurance companies to develop an algorithm for safe driving behavior that is expected to receive regulatory approval in the first half of 2022. GM believes that using data processing insurance generated by cars will also help GM process claims at a faster pace, sometimes knowing the extent of damage almost immediately and making claims quickly, rather than taking 18 to 25 days to resolve the issue. In the claims cycle, time is money.
GM also said the car-based system will be more accurate because the data will come from the car itself, and the car itself can track factors such as seatbelt usage that cell phones can't track.
4
Exclusive cars are difficult, so it is better to reduce the pricing level first
The above-mentioned person in charge of car technology judged that new energy vehicles have the attributes of online, data and intelligence, and are an important scene end of future car insurance reform and innovation. New energy vehicle companies can launch personalized car insurance based on "mileage" and "duration" according to user attributes, driving habits and other dimensions, so that people can use car insurance like "electricity". Looking to the future, the intelligent trend of fuel vehicles has also provided impetus for innovative car insurance. This means that regardless of the energy supply method, innovative car insurance will become the mainstream of future car insurance.
But that's easier said than done. At present, the growth rate of auto insurance is far from keeping up with the development rate of automotive technology. Insurance companies generally lack underwriting experience in new energy vehicles, and the practical difficulties faced by new energy intelligent car insurance are high insurance rates, expensive maintenance, high compensation, difficulty in settling claims, easy losses in underwriting, difficult pricing, and so on.
The data points out that the payout rate of new energy vehicles is as high as 85%. Wang Hao, founder and CEO of Coppola Auto Consulting Services (Qingdao) Co., Ltd., told reporters that the fact far exceeds this figure, even reaching 150% to 180%.
If car companies want to rush out of the predicament and launch captive insurance, how to break through supervision is the first hurdle. For example, if Tesla wants to extend its insurance business to China and launch an exclusive "Tesla car insurance" for Chinese users, whether it is a new or controlled insurance company, its regulatory environment is not available. The same is true for car companies such as Weilai and Xiaopeng, who laid out the car insurance market earlier.
Peng Zhao explained that car insurance follows the law of large numbers, that is, pricing rules are derived from a certain data base. After a century of development, fuel vehicles have matured and stabilized their technology, and under the impact of the new energy wave, the technological development of fuel vehicles has almost "peaked". As a "rising star", the electric and intelligent technologies of new energy intelligent vehicles are still in a period of rapid iteration, and it is difficult to form a stable data accumulation in a short period of time. Coupled with the different national conditions of the mainland, under the overall framework of car insurance products, the launch of exclusive car insurance will take time.
In fact, the encouragement at the policy level has already begun, after the CbRC issued the "Guiding Opinions on the Implementation of the Comprehensive Reform of Automobile Insurance (Draft for Comments)", which emphasized the need to enrich commercial auto 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).
This also 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.
Peng Zhao believes that at this stage, car companies should not first make full use of their own data advantages, cooperate with insurance companies, use existing car insurance terms, provide more accurate data for cooperative insurance companies, profile the brand customers, prove that premium pricing is high and reduce premiums; or use technical means to reduce the zero-to-integer ratio, thereby achieving a decline in premiums.
Text: Hao Wenli Editor: Qi Meng Layout: Liu Xiaoye