After BYD won the insurance license to enter the car insurance market, it has entered the new energy vehicle insurance market strongly, whether it can "knock down" the price of new energy vehicle insurance and bring new changes to the market
Text: "Caijing" researcher Ding Yan Reporter Yang Rui
Editor|Yang Rui Zhang Wei
"BYD car insurance, Denza D9 insurance price, pure benefits" "The first year premium of 240,000 yuan luxury car is only 6,500 yuan, BYD has brought down the price of car insurance" "BYD's car is cost-effective, and the insurance should be more" "BYD a plug-in hybrid car, the commercial insurance premium is only 1,423.63 yuan"......
Recently, with the official opening of Shenzhen BYD Property Insurance Co., Ltd. (hereinafter referred to as BYD Insurance) online insurance portal, many car owners have purchased new energy vehicle insurance independently. BYD Insurance's online insurance coverage covers seven provinces including Anhui, Guangdong, Shaanxi, and Hunan, but currently only supports non-operating private cars with less than 10 seats, and both new and old cars can be insured.
It is understood that since mid-May this year, BYD has gradually carried out auto insurance business in Guangdong, Shaanxi, Shandong (excluding Qingdao), Anhui, Jiangxi, Henan and Hunan in stages.
As the head enterprise of new energy vehicles in China, BYD jumped into the field of new energy vehicle insurance like a catfish, and the industry is concerned about whether it can improve the quality and reduce the cost of new energy vehicle insurance, which is still in the early stage of market exploration.
At present, many car owners have posted insurance policies on social platforms, a BYD plug-in hybrid car, the price of commercial insurance premium documents is only 1423.63 yuan, including 762.74 yuan for vehicle loss insurance with an insurance amount of 157,800 yuan, and 515.17 yuan for third-party liability insurance with an insurance amount of 3 million. At the same time, the premium of BYD Denza D9 purchased by a car owner is 3113.29 yuan, of which the premium of car damage insurance is 2214.54 yuan and the third-party liability insurance is 834.77 yuan.
According to some BYD car owners, the renewal price of the same car purchased on BYD's self-operated platform is lower than that of other platforms.
Due to the high loss ratio, the current new energy vehicle insurance underwriting of traditional insurance companies is still in a loss-making state. Wang Chuanfu, chairman of BYD, believes that if the vehicle design can be disassembled and repaired, it can greatly reduce the cost of insurance compensation and connect insurance and design. "BYD wants to dig out the cost of insurance, reduce the cost of insurance, and make money without losing money. Optimize the design of new energy vehicles through the problems found by insurance. ”
According to an analysis by a property insurance insider, BYD's self-operated auto insurance business has relatively advantages, and the data, loss assessment and claims will be relatively accurate. According to a person familiar with the matter, BYD's goal at the new energy vehicle insurance market is far more than just earning income, and its goal is to win the entire new energy vehicle aftermarket and realize the "self-insurance" of new energy vehicle insurance. BYD has mastered the most critical data and technical advantages of new energy vehicles, and can customize exclusive insurance for new energy vehicles through first-hand information to achieve more accurate pricing, while taking into account sales, forming a closed loop of industrial chain services.
According to an auto industry insider, BYD belongs to the automobile manufacturing industry, driven by the wolf work culture, and will do its best to reduce the cost of new energy vehicle insurance in the future. However, unlike making and selling cars, the insurance business is still a new field for BYD, and the talent shortcomings also need to be filled. In addition, it is worth noting that BYD's auto insurance sales channels are also challenging.
From a global perspective, Warren Buffett, CEO of Berkshire Hathaway, believes that it is not a new idea for car companies to do their own insurance, but it seems that this idea is more likely to land in the era of electric vehicles. However, in practice, this idea is difficult to implement, such as matching the ratio between insurance price and risk, especially in terms of risk management and control capabilities, and car companies may still be far from the ability to operate auto insurance business independently.
Enter the game strongly, accelerate in the corner
With the acceleration of the development of new energy vehicles, the new energy vehicle insurance market has become a "battleground".
BYD's layout of new energy vehicle insurance needs to be traced back to a year ago, when it acquired 1 billion shares of Yi'an Property Insurance and wholly owned Yi'an Property Insurance. On May 12, 2023, Yi'an Property Insurance officially changed its name to BYD Insurance, and since then, it has begun to quickly enter the process of capital increase, change business scope, and approval of auto insurance terms.
Since May last year, BYD Insurance's development ideas have been clear, mainly divided into a "three-step" plan: the first step is to submit the auto insurance business qualification to the regulator and obtain approval, complete the development and reporting of new energy-related products to the regulator, build a new energy auto insurance related system, including sales, underwriting, claims, finance, actuarial, etc., and establish a strategic cooperative relationship with the head insurance company.
The second step is to complete the docking and integration of property insurance channels and investors' sales networks, and give full play to BYD's channel advantages. Complete the docking and integration of claims settlement and maintenance networks, and give full play to the cost advantage of vehicle damage insurance. At the same time, within the investor network, a professional personal injury claims team is deployed to improve the ability to handle personal injury cases.
The third step is to further optimize the actuarial pricing model in the next three to five years, relying on the advantages of new energy vehicle data, to provide more convenient auto insurance services for car owners, and to provide reference for other new energy vehicle insurance operations in the industry.
What are the odds of car companies getting involved in new energy vehicle insurance?
Wang Chuanfu once said that BYD's entry into the new energy vehicle insurance industry will use the accumulation of technology, sales, users and other aspects to empower the new energy vehicle insurance industry in terms of cost saving and scientific claims.
A person in charge of new energy vehicle insurance of a leading insurance company believes that under the direct sales and networked model, OEMs can directly reach consumers when doing insurance, and use the stickiness of insurance to completely lock customers in the BYD ecosystem, which can tap the long-term value of customers. At the same time, OEMs have more owner data, which can bring innovative product space; In addition, the OEM's sales and maintenance service network outlets can quickly access claims.
However, there are also disadvantages of OEM insurance. First of all, insurance operations are more specialized, such as underwriting, pricing, claims and other specialized and data-based management capabilities need to be accumulated, and at the same time, system supporting capabilities are required. Second, the risk concentration problem brought about by a single brand. Once a car company does insurance, once there is a business with a high amount of compensation, if the car company's own insurance company cannot underwrite it, it may be difficult for other insurance companies to accept it. In addition, car companies are relatively short of insurance professionals.
According to the research report of Soochow Securities, at this stage, insurance companies lack new energy vehicle loss assessment talents, and cannot carry out on-site damage assessment after the accident, new energy vehicle companies can simplify the new energy vehicle claim process, and at the same time, car companies can design innovative car insurance products that better match the risk of car and claims.
From the perspective of the current development process of BYD Insurance, in September 2023, the State Administration of Financial Supervision and Administration (hereinafter referred to as the "State Administration of Financial Regulation") approved the change of the registered capital of BYD Insurance from 1 billion yuan to 4 billion yuan; In November of the same year, the State Administration of Financial Supervision approved BYD Insurance to change its business scope to include motor vehicle insurance (including compulsory motor vehicle traffic accident liability insurance and motor vehicle commercial insurance) into its business scope.
One year after the layout, on May 6, 2024, the State Administration of Financial Supervision issued an announcement stating that it agreed that BYD Insurance would use the national unified compulsory traffic insurance terms, basic insurance rates and corresponding rate floating coefficients in Anhui, Jiangxi, Shandong (excluding Qingdao), Henan, Hunan, Guangdong, Shaanxi and Shenzhen. This is also the second substantial progress of BYD Insurance's auto insurance business after its auto insurance business scope was approved in November last year.
It is understood that on May 3, BYD has set up an insurance service entrance in its official App, with a service scope of 7 main categories and 15 subdivisions of vehicle insurance products, including compulsory traffic insurance and commercial insurance, but online insurance is not supported at that time.
Up to now, according to the official website of BYD Insurance, BYD Insurance's business scope includes 7 main categories, namely vehicle insurance, liability insurance, freight insurance, accident insurance, health insurance, family property insurance, and enterprise property insurance.
The "catfish effect" stirred up the market
According to the data of Shenwan Hongyuan Securities Research Report, by 2025, the domestic new energy vehicle insurance premium scale will reach 154.3 billion yuan, accounting for about 15.7% of the total car insurance premium, and by 2030, the new energy vehicle insurance premium scale will reach 1.3 trillion yuan, accounting for about 31.3% of the total car insurance premium.
On June 20, the auto insurance service data disclosed by the Internet insurance agency platform "Ant Insurance" showed that the proportion of new energy vehicles insured on the platform has increased year by year, increasing by three times in three years, confirming the trend of the transition of the domestic automobile consumption market from fuel vehicles to new energy vehicles. Among the top ten new energy models in Bao, domestic brands occupy 9 seats, and BYD, Wuling, and Tesla are the top three.
According to data from the China Association of Automobile Manufacturers, the penetration rate of new energy vehicles in China climbed from 5.4% to 31.6% from 2020 to 2023, and is expected to approach 40% in 2024. The above data also shows that male car owners prefer new energy vehicles. Among the new energy vehicles in Bao, female owners accounted for 33%, while male owners accounted for 67%. High degree of intelligence, low cost of use, and no restriction on driving have become the main reasons for car owners to choose new energy vehicles.
The new energy vehicle insurance business is growing, but there are also challenges in its development. Data shows. In 2023, the comprehensive cost ratio of new motor insurance policies will basically exceed 100%, and some companies will even have a comprehensive cost ratio of 130%. At present, the new energy vehicle insurance business is generally in a loss-making state.
Wang Xiangnan, deputy director of the Insurance and Economic Development Research Center of the Chinese Academy of Social Sciences, pointed out that the lack of "accurate pricing power" is the main reason for the loss of auto insurance business, especially new energy vehicle insurance. Previously, car insurance pricing was more based on car factors, such as vehicle model, vehicle age, vehicle integer ratio, value retention rate, etc. However, whether there is a risk or not, it is often the human factor that plays a decisive role, such as the driving skills and habits of the car owner.
In addition to BYD, Tesla, Xpeng, Ideal and other car companies have also tried to get a share of the new energy vehicle insurance market in recent years by acquiring insurance intermediary licenses.
The advantages and disadvantages of new energy vehicle companies entering the new energy vehicle insurance market are obvious. According to the analysis of a third-party insurance platform, there are many links in auto insurance, which require very refined operations, and there are challenges in sales, underwriting, and claims.
Shan Shufeng, member of the Party Committee and deputy general manager of the Shanghai Insurance Exchange, once said at a new energy vehicle insurance industry exchange meeting that the development of high-quality new energy vehicle industry and high-quality new energy vehicle insurance requires cross-industry integration. According to the analysis of a senior industry insider in the property insurance industry, the establishment of a user-centric service system, the accumulation of data, the optimization of services, the acceleration of data interconnection, the classification of users through behavioral data, to achieve accurate pricing, differentiated pricing is a major trend of the integration of car companies and insurance companies.
At the same time, encouraging insurance companies to set their own prices is also the direction of the reform of the auto insurance industry in recent years. At the end of April this year, the Department of Property and Casualty Insurance of the State Administration of Financial Supervision issued the Notice on Promoting the High-quality Development of New Energy Vehicle Insurance (Draft for Comments), proposing that the range of independent pricing coefficients for new energy commercial vehicle insurance should be implemented according to [0.5~1.5], which further enhanced the pricing power of market operators. At present, the range of independent pricing coefficients of new energy commercial vehicle insurance has been on par with that of fuel vehicles.
From the perspective of the innovation dimension of new energy vehicle insurance, in order to solve the pricing problem of new energy vehicle insurance, a number of insurance companies such as PICC Property Insurance, Ping An Property Insurance, and Pacific Property Insurance have recently cooperated with "Ant Insurance" to jointly develop and launch the "joint pricing" technology of auto insurance. In the future, new energy vehicle companies, insurance institutions and third-party platforms will also bring more innovation and changes to the new energy vehicle insurance market.