Taking advantage of scientific and technological progress and favorable policies, the mainland's low-altitude economy is developing rapidly. Just as cars have car insurance on the road and civil airliners have aviation insurance, with the increasing frequency of low-altitude economic activities, the demand for insurance protection is also more vigorous.
(The picture comes from the Internet)
The low-altitude economy is developing rapidly
A "flying" commute, a scene that once only appeared in science fiction movies, will come to people sooner than imagined. Hu Huazhi, chairman and CEO of Guangzhou EHang Intelligent Technology Co., Ltd., said that the company is implementing model construction of low-altitude economic application scenarios in Hefei, Guangzhou, Shenzhen and other cities. "There was no driver on board, just two passengers. Just like a bus stop, we set up take-off and landing points every few kilometers in the city and fly in a straight line from point to point, and the distance of about 10 kilometers can only be reached in five or six minutes. ”
In April this year, the Civil Aviation Administration of China issued a production license for EHang's EH216-S unmanned manned aircraft system in Guangzhou. Together with the type certificate and standard airworthiness certificate obtained last year, EH216-S has become the world's first manned unmanned eVTOL (electric vertical take-off and landing) aircraft to obtain the "three major passes" for airworthiness. This means that EH216-S will enter the link of expanding production, commercial operations, and getting closer and closer to consumers.
The low-altitude economy is showing great market potential. According to the "Research Report on China's Low-altitude Economic Development" released by CCID Consulting in April this year, the scale of China's low-altitude economy will reach 505.95 billion yuan in 2023, with a growth rate of 33.8%; In 2023, the scale of China's eVTOL industry will reach 980 million yuan, a year-on-year increase of 77.3%. By the end of February 2024, there were 57,000 enterprises in China's low-altitude economic sector.
In January this year, the Interim Regulations on the Flight Management of Unmanned Aircraft issued by the State Council was officially implemented, clarifying for the first time that unmanned aircraft must purchase liability insurance. In recent months, the Shenzhen Supervision Bureau of the State Administration of Financial Supervision and Administration has guided the industry to officially release the "Model Clauses for Third Party Liability Insurance for Unmanned Aircraft (Shenzhen)"; The General Office of the People's Government of Guangdong Province issued the Notice on Printing and Distributing the Action Plan for Promoting the High-quality Development of the Low-altitude Economy in Guangdong Province (2024-2026), proposing to explore the construction of a science and technology insurance service mechanism. Li Jianping, an associate professor at Zhengzhou Institute of Aeronautical Industry Management, believes that the current market size of low-altitude economic insurance in the mainland is small, and both policyholders and insurance products have not yet formed a completely competitive market.
"Low-altitude economic insurance is not only drone insurance, but the current focus is still on drone insurance, and further enrich the supply of related insurance products driven by increasingly diversified innovative application scenarios. For example, in view of the current low-altitude logistics and manned hot spots, the development of drone transportation, drone freight and other types of insurance. The person in charge of the relevant business of the special risk business department of Chinese Life Property Insurance said.
As a comprehensive economic form of integrated development, the low-altitude economy not only contains rich product types and diverse application scenarios, but also means a complex and complete industrial chain. For example, engineering insurance, liability insurance, and accident insurance for upstream industry construction; Product liability insurance, safety production liability insurance, aircraft flight test insurance, etc. The aircraft operation and maintenance involved in the downstream application services, and the liability accidents of related personnel all need insurance protection, such as aircraft insurance, third-party liability insurance, cargo insurance, pilot accident insurance, repairer liability insurance and other professional liability insurance, network security insurance, etc.
"The insurance business related to the low-altitude economy is mainly concentrated in the middle and lower reaches. At present, the upstream is gaining momentum, the midstream has developed to a certain scale and has some insurance needs, while the downstream application scenarios have great imagination and great potential, which will be the focus of attention in the future. The person in charge said that the upstream, middle and downstream of the low-altitude economy involves many industries and customer groups, and for insurance companies, for different industries and enterprises, they must provide insurance solutions with the concept of comprehensive and full service.
(The picture comes from the Internet)
Insurance services struggle to catch up
The low-altitude economy is flying high, and in comparison, the insurance service is somewhat unable to catch up. In Yuli County, Xinjiang Uygur Autonomous Region, there are only two "post-90s" daily managers of 3,000 acres of super cotton fields. "We have achieved an unmanned rate of about 80% by using products and technologies such as agricultural drones, remote sensing drones, intelligent water and fertilizer irrigation systems, and agricultural Internet of Things equipment." Ai Haipeng, manager of super cotton fields at Guangzhou XAG Technology Co., Ltd., said that in 2021, he and his colleague Ling Lei set a goal of "two people planting and harvesting 3,000 acres of cotton fields" in Yuli County. A year later, this goal was not only achieved, but the yield per mu of the super cotton field was increased by 50 kilograms compared to the surrounding farmers. Nowadays, many growers have approached Ai Haipeng and said that they also want to grow cotton with the management method of super cotton fields.
After the product was successfully recognized by the market, more after-sales problems followed. "Compared with consumer-grade drones, agricultural drones have a higher probability of exploding." Sun Wei, a distributor of XAG Technology in Fuyang, Anhui Province, said that on the one hand, the operating environment of agricultural drones is relatively complex, although it is not easy to cause personal injury accidents, it is easy to touch trees, telephone poles and even high-voltage lines; On the other hand, the load load, frequency of use, and continuous operation time of agricultural drones are much higher than those of aerial photography drones, so the failure rate is also higher.
Back a decade ago, when drone manufacturer XAG began to transform into specializing in agricultural drones, there were few drone insurance products available for purchase on the market. XAG decided to be "self-reliant" and released the first fuselage insurance, which is similar to motor vehicle damage insurance, as long as there is a bombing accident, the company provides free maintenance. The explosion insurance launched by XAG Technology that year was designed and operated by one of the company's business units and purchased by users on XAG's system. Compared with the professional insurance provided by insurance companies, this is more like the after-sales service launched by drone manufacturers. It is only in recent years that there have been some new developments in the drone insurance market, and airframe loss insurance, third-party liability insurance, and pilot liability insurance have become more common. However, it is clear that there is still a long way to go compared to the product-rich and competitive auto insurance market.
Cheng Yi, the distributor of XAG Technology in Xuzhou, Jiangsu, often helps customers deal with after-sales problems. "It is hoped that the third-party liability insurance of drones can increase the proportion of compensation, reduce the minimum amount of compensation, and expand the scope of liability. Sometimes, due to pilot error or weather changes, the pesticides sprayed by the drone drift to other plots. It stands to reason that this situation also causes damage to a third party, but the insurance company generally does not pay for it. Cheng Yi said that the premium of third-party liability insurance is generally more than 100 yuan a year, and most pilots buy it just for peace of mind, and rarely take the initiative to understand how to protect the insurance, and at the same time, the insurance product also lacks publicity. In addition, although the Interim Regulations on the Flight Management of Unmanned Aerial Vehicles, which were implemented this year, make it clear that unmanned aerial vehicles must purchase liability insurance, there is also a lack of supervision on whether pilots actually purchase them. "After purchasing the drone, XAG will give away third-party liability insurance in the first year. However, many pilots will not renew their insurance after the first year because they have not had an accident. Cheng Yi said.
"Although the rapid development of the low-altitude economy has brought huge opportunities to the insurance market, the insurance products in the current market are still relatively limited, and they are mainly concentrated in subdivisions such as drone insurance." From the perspective of low-altitude economy enterprises, Lu Chengcheng, chief engineer of EHang, expressed his demand for insurance companies: First, enterprises hope that insurance companies can have a deeper understanding of the technological innovation of low-altitude economy and have a deeper understanding of safety, so as to truly strengthen risk assessment and pricing capabilities, and provide more accurate insurance services and prices. Secondly, companies hope that insurance companies can have a more comprehensive understanding of the application scenarios of the low-altitude economy and provide more comprehensive and flexible insurance products. Finally, companies also hope that insurance companies can strengthen technological innovation and service upgrades to improve the efficiency and convenience of insurance business.
It is understood that the property insurance company under Chinese Life Group continues to carry out drone insurance-related business, and has officially reported the main insurance terms of drone insurance and a series of additional insurance products, mainly providing insurance protection for drone applications in the fields of police law enforcement, fire rescue, power patrol, surveying and mapping, and plant protection. With the implementation of mandatory liability insurance for drones and the identification of low-altitude economy as a strategic emerging industry, Chinese Life Property Insurance Company has stepped up product development work, and has launched 3 additional insurances to meet customers' all-round protection needs with the main insurance, and actively develop new products according to market demand. The next step of Chinese Life Property Insurance will understand the low-altitude economic industry model, starting from the construction of industrial bases, product research and development, product operation, product maintenance and other links, starting from manufacturers to explore and provide a package of solutions for low-altitude economic customers.
Supporting policies need to be refined
Despite seeing the huge development potential of low-altitude economic insurance, insurance companies still dare not rush into the market, and there are many objective reasons behind this. "Insurance follows the law of large numbers, and mature insurance products need a large amount of homogeneous risk data as a foundation. However, there is not enough available data in the field of low-altitude economy, and the relevant laws and regulations are not perfect, so low-altitude economic insurance is facing great challenges in product design, pricing, and claims. Lu Chengcheng said.
At present, the formulation of product liability standards for low-altitude aircraft is not mature enough. There is a strong relationship between the fuselage insurance of drones and the stability of products, but the variety of product types and inconsistent quality in the industry have resulted in a lack of basis for the liability design of insurance products. In June this year, the first national standard in the field of civil unmanned aerial vehicles in mainland China, "Safety Requirements for Civil Unmanned Aircraft Systems", was officially implemented. "Unlike automobiles, which have been developed for hundreds of years, there are many industry standards, such as the safety crash test when the car leaves the factory, and there are also requirements for the body structure. Now drones are coming out with new products every year, and when the innovation and iteration of new products is too strong, there will be a situation where insurance cannot keep up. Ai Haipeng said.
Low-altitude flight activities also face the dilemma of determining responsibility. When a car is involved in a traffic accident, the follow-up treatment is often smooth: the traffic police determine the responsibility for the accident, the car insurance claims adjuster investigates and assesses the damage, and the repair shop carries out repairs. But for low-altitude flight activities, determining responsibility for accidents is much more complicated as the first step. "When an insurance company determines a drone accident, it must first confirm the owner, and secondly, it must be able to prove that the accident was caused by the owner's operation problems. The complex identification process makes it difficult to reflect the guarantee role of general aviation liability insurance. Li Jianping said.
The development of the UAV industry in mainland China is quite different, and many provinces and cities have formulated their own product standards and regulatory systems, which may lead to different results or disputes over the handling of accidents. In addition, drone insurance may also involve data valuation issues. "How to evaluate the value of the data obtained by drones in the air is also a problem faced by drone insurance in the future." Li Jianping said.
"We hope that the relevant departments can further clarify and refine the supporting implementation rules of the "Interim Regulations on the Flight Management of Unmanned Aircraft" to facilitate the promotion and implementation. At the same time, it is hoped that the industry and regulatory authorities will organize more relevant exchanges and training, so that insurers will have the opportunity to contribute more to the development of the low-altitude economy. The person in charge of the relevant business of the special risk business department of Chinese Life Property Insurance said.
"The soundness of the legal system and the development of science and technology are the cornerstones of the development of the drone insurance industry. At the same time, there is a need for a response from all sectors of society. Li Jianping suggested that to consolidate the foundation for the development of drone insurance, the first is to speed up the construction of relevant liability systems, formulate a national regulatory system, operator training requirements, etc. Second, the insurance industry and relevant national policies should cooperate with each other, including the development of insurance products under the regulatory system, and the formulation of underwriting requirements by the insurance industry itself. (Source: Economic Daily)