Xiaomi's car can afford it, but can't the insurance afford it?

China News Weekly

2024-05-18 09:20Published on the official account of China News Weekly in Beijing

New energy vehicle insurance is falling into a strange circle: "car owners shout expensive, insurance companies call losses." ”

The pricing range of Xiaomi SU7 is 215,900 yuan to 299,900 yuan, and the premium of 6,000 yuan to 8,000 yuan in the first year of its car insurance has been complained by netizens.

Image source: Xiaomi Auto

On the evening of May 13th, Xiaomi SU7 answered questions from netizens released by the WeChat public account of Xiaomi Auto, showing that "Xiaomi SU7 premiums are priced by cooperative insurance companies", "Beijing as an example, choose the basic version of the insurance plan Xiaomi SU7 premium is about 5200 yuan, Xiaomi SU7 Max premium is about 6600 yuan, in line with the current price range of 200,000 yuan - 300,000 yuan in the market main sales of new energy electric car overall premium pricing level." ”

In new energy vehicles, such car insurance prices are indeed not uncommon. The owner of Hangzhou BYD Han said, "The amount of car insurance in the first year is 6,980 yuan, and I feel that I am using the saved fuel money to buy insurance."

Image source: BYD

During the renewal process, some new energy vehicle owners also encountered problems.

Mr. Wang, the owner of BYD Qin, said that he was almost denied insurance by the insurance company because the vehicle had been insured last year and the mileage was high. In addition, Ms. Tesla's Model Y driver said that her vehicle was told by the salesman that the "overall score was too high" when the insurance expired and was renewed. The so-called score not only includes factors such as vehicle accidents and violations, but also includes factors such as vehicle type information, car owner's gender, age, and credit information. The "surprising" indicators such as new energy models, high mileage, young age, and female car owners have all become items that lead to high ratings, which will not only lead to high final premiums, but may even lead to "refusal of insurance".

On the one hand, consumers are complaining about new energy vehicle insurance, and on the other hand, in the eyes of people in the insurance industry, new energy vehicle insurance is not a money-making project at present.

Gu Yue, chairman of CPIC Property & Casualty, said at the 2023 results conference that the accident rate of new energy vehicles is twice as high as that of fuel vehicles. Yu Ze, president of PICC P&C Insurance, also pointed out at the performance meeting that the loss ratio of new energy vehicle insurance in the entire industry is probably more than 10 percentage points higher than that of fuel vehicles.

What is the reason for the strange image of "car owners shouting expensive and insurance companies shouting losses" in new energy vehicle insurance? Can it be improved?

Behind the high level of new energy vehicle insurance

According to the statistics of the China Passenger Car Association, as of mid-April 2024, the retail penetration rate of new energy passenger vehicles in mainland China exceeded 50% for the first time. This means that for every two passenger cars sold, one is a new energy vehicle.

When a vehicle is sold, the first problem to be solved is insurance. To be able to undertake new energy vehicle insurance, the requirements for insurance companies are still relatively higher.

Fang Zhongyou, chairman of the C-IASI Expert Committee, told China News Weekly: There are 85 property insurance companies in China, and 64 are currently engaged in auto insurance, but no more than 15 are engaged in new energy vehicles, and they are mainly concentrated in the head enterprises.

According to PICC's 2023 annual report, the number of new energy vehicles insured by the company increased by 57.7% year-on-year; According to CPIC property insurance data, new energy vehicle insurance will increase by 54.7% year-on-year in 2023.

However, with the increase in the number of new energy vehicles underwritten, the comprehensive cost ratio of insurance companies has also increased significantly. According to the 2023 annual reports of insurance companies, the comprehensive cost ratio of PICC P&C was 96.9%, an increase of 1.3 percentage points from the previous year, the comprehensive ratio of Ping An Property & Casualty was 97.7, a year-on-year increase of 1.1 percentage points, and the comprehensive ratio of CPIC P&C was 97.6, an increase of 1.1 percentage points from the previous year.

According to the report of Shenwan Hongyuan, the loss ratio of new energy vehicle insurance is close to 85% on average, and the new energy vehicle insurance business of most insurance companies is on the edge of the profit and loss line, and the loss pressure is greater.

"Due to the rich configuration of radar sensors, various lights and shapes, and high technical content, the price of new energy vehicles is slightly higher than that of traditional fuel vehicles. Coupled with the handling performance and driving and use factors of new energy vehicles, it is an indisputable fact that the insurance rate and compensation amount of new energy vehicles are higher than those of traditional fuel vehicles from the perspective of the insurance industry. Liu Shulin, president of the China Insurance Research Institute of Automotive Technology and Research, told China News Weekly.

In Liu Shulin's view, as the market penetration rate of new energy vehicles continues to increase, the importance of its crashworthiness and maintenance economy design should also be improved. "Crashworthiness and maintenance economy are not only related to the cost of car maintenance for ordinary people, but also highly related to the compensation of insurance companies' car damage insurance."

Compared with traditional fuel vehicles, the mechanical failures and the consumption and replacement of wearing parts of new energy vehicles are significantly reduced. Instead, there are some electronic, communication, and intelligent failures, which need to be indirectly reflected through various equipment detection.

At the same time, because the core technology of the "three electrics" system of batteries, motors and electronic control of various brands of new energy vehicles is not open to the outside world, it is difficult for traditional auto repair shops to obtain maintenance authorization from manufacturers. If the problem involves the failure of the "three electrics" system, traditional auto repair shops often do not know how to repair it and dare not repair it.

In addition, some new energy vehicles with high annual mileage have also encountered rising premiums or even refusal of insurance. A person related to the auto insurance business of an insurance company told China News Weekly, "New energy vehicles with too high annual mileage may be judged by the system to be online car-hailing." At present, there are indeed many cases where family cars are insured, but they are actually running online car-hailing, and the probability of insurance for such models is greatly increased. ”

What's the solution?

At present, the plight of new energy vehicle insurance has attracted the attention of all parties.

On the one hand, some car companies have directly started the insurance business.

On May 6, BYD Property Insurance was approved to use the national unified compulsory traffic insurance terms, basic insurance rates and corresponding rate floating coefficients in eight regions across the country. Almost at the same time, new energy vehicle companies such as NIO, Xpeng, and Li also set up or acquired insurance intermediary licenses to "intervene" in the auto insurance market. NIO acquired HITOP Insurance Brokers and changed its name to NIO Insurance Brokers, and Ideal obtained an insurance brokerage license through the acquisition of Yinjian Insurance Brokers.

On the other hand, the policy is also constantly optimizing to guide the standardized development of the industry.

In late April, the Department of Property and Insurance of the State Administration of Financial Supervision and Administration issued the Notice on Promoting the High-quality Development of New Energy Vehicle Insurance (Consultation Paper) (hereinafter referred to as the "Consultation Paper").

In the Consultation Paper, the range of independent pricing coefficients for new energy commercial vehicle insurance will be on par with that of fuel vehicles. The Consultation Paper mentions that the independent pricing coefficient range of new energy commercial vehicle insurance will be implemented from 0.5 to 1.5, so as to improve the pricing power of market operators and give full play to the decisive role of the market in resource allocation.

As for the use of new energy vehicles for part-time online car-hailing operations, the Consultation Paper also mentions that it is necessary to study the launch of "basic + change" combination insurance products to provide more comprehensive insurance protection for new energy vehicles operating part-time online car-hailing. The "Draft for Comments" also proposes to establish a comprehensive protection mechanism for new energy vehicle insurance, promote industry research and establish a comprehensive protection mechanism for high-risk vehicles, effectively solve the problem of difficulty in insuring some vehicles, and realize the full insurance.

"We have recently held a discussion meeting on new energy evaluation procedures, and the C-IASI 2023 version will also add a new energy special evaluation index to evaluate the battery safety and maintenance economy that everyone is very concerned about." Xie Baolin, secretary general of the C-IASI Safety Index Expert Committee, told China News Weekly that the C-IASI 2023 version of the regulations will be upgraded according to the insurance industry's risk identification needs for the latest models on the basis of the current development trend of vehicle electrification and intelligent technology. Among them, in terms of the safety of new energy vehicles, it includes issues of concern such as whether the battery will catch fire and personnel safety after a major traffic safety accident. In terms of maintenance economy, including the pain points of the industry such as how to repair the battery, where to repair it, and what the maintenance standard is in the insurance company's claims.

"We want to increase the measurement of the economics of repairs and make the battery rules more transparent in the future." "We hope to establish testing standards in China and drive down the cost of using cars. ”

Liu Shulin said, "China Insurance Research Institute will strengthen evaluation and publicity in the future, calling for optimizing the crashworthiness and maintenance economy design, and reducing the collision loss of new energy vehicles; In response to the changes of intelligent technology to driving and using vehicles, the content of low-speed active safety evaluation is added, which objectively reflects the improvement effect of intelligent technology on crashworthiness and maintenance economy. ”

Fang Zhongyou said that in the future, new policies may be implemented for new energy vehicle insurance rates, and the range of rate fluctuations will be expanded. "This is an opportunity for China's insurance safety index, calling on car companies to pay attention to new technologies as well as maintenance economics."

Author: Liu Shanshan

Editor: Zheng Yu

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