Can BYD's entry into the auto insurance market defeat the impact of insurance companies on the king of new energy auto insurance?

The new battle of new energy car insurance has begun.

Recently, the State Administration of Market Supervision formally approved BYD Insurance Brokerage Co., Ltd., and BYD's ambition to enter insurance is self-evident. Prior to this, BYD has released recruitment information for a number of insurance positions, including vice general manager, director of operations, director of compliance, compliance manager, treasurer, product manager, insurance claims specialist, etc.

Enter the insurance intermediary license plate, in front of Tesla and Weilai, and then BYD, the target is aimed at new energy car insurance. A senior person in the property insurance industry analyzed to the Financial Associated Press, "BYD's layout of brokerage license is more worthy of attention than Ulay, because BYD is the intersection of traditional car companies and new energy car companies." This means that both new energy car companies and traditional car companies are pinning their hopes on winning their own license plates to achieve the opening of the sales model and car insurance service packages, and then to create a closed loop of services. "

Challenges and opportunities for automobile enterprises to enter the bureau coexist

In January, Xilai just announced the establishment of an insurance brokerage company, and BYD's insurance brokerage company is on the brink.

The background of the industry is that on December 27, 2021, the China Insurance Industry Association New Energy vehicle Commercial Insurance exclusive Clause (trial) was officially launched, requiring all new energy vehicles to be covered by new energy vehicle insurance.

Correspondingly, new energy car companies have laid out and bet on their insurance broker licenses in advance. As early as August 2020, Tesla set up an insurance brokerage company in Shanghai.

According to the analysis of Ping an Securities Research report, with the development of new energy vehicles and the release of "exclusive terms", new energy vehicle insurance is expected to become an important growth point of the auto insurance industry. The traditional car companies represented by GAC GROUP and the new energy car companies represented by Tesla have all made some moves to enter the auto insurance industry. As a leading entrant, Tesla is at the forefront of the industry in the field of auto insurance.

Data show that from 2013 to 2020, the number of new energy vehicles insured continued to increase from 140000 to 4.92 million, with an annual compound growth rate of 56%; the scale of new energy vehicle insurance premiums increased from 1.16 billion yuan to 24.6 billion yuan, with an annual compound growth rate of 46.5%. In the future, with the accelerated expansion of the new energy vehicle market, there is a huge demand for the new energy vehicle insurance market to be developed.

As the car company that joined the bureau, BYD has aimed at the great potential of the new energy vehicle market since it launched its first dual-mode electric car in 2008, and has made great plans. By January 2019, BYD's sales of new energy vehicles exceeded its own fuel vehicles for the first time, accounting for 65% of total sales, making it a typical new energy car company.

According to a reporter from the Financial Associated Press, BYD's sales of new energy vehicles are on the rise, reaching 88283 in February, an increase of 752.6 percent over the same period last year.

According to the analysis of Ping an Securities Research report, new energy vehicle insurance is an important part of the ecological chain of automobile enterprises, which helps to give full play to the advantages of automobile companies in data and technology. New energy vehicles mainly adopt the direct sales model, through direct shopping malls or online sales, car companies have a close relationship with users, while expanding car maintenance, claims repair, auto finance and other automotive aftermarket business.

Compared with traditional insurance companies, car companies have higher cost and efficiency in obtaining data, and it is easier to realize data collection and analysis to output pricing model, which can achieve accurate pricing, give full play to cost advantages and provide lower premiums. At the same time, using the data generated by cars to process insurance will greatly improve the speed of claim processing and shorten the claim processing cycle. The double advantages in price and experience help to attract more consumers to take out insurance.

The advantages are clear and the challenges also exist.

According to an analysis by a large property insurance company, "the challenge of new energy car companies entering the bureau car insurance is still very obvious. the first is the license plate, the localized operation of car insurance, and different products have different pricing and fee policies." car companies do not have the ability to quickly reserve a large number of product contracts. Secondly, the construction of the service network also takes time to accumulate. "

According to the analysis in the White Paper on New Energy Automobile Insurance, both traditional car companies and new car-building forces do not have experience in the car insurance industry, and they all need to spend a lot of manpower and financial resources to enter the car insurance track, not to mention the current car sales war is still raging. Energy is limited. Therefore, if auto companies want to seize the first opportunity in the auto insurance market, they also need to complement each other with capable service providers and win-win cooperation.

Catfish effect may force dangerous enterprises to change.

In the competition between car companies and insurance companies, the advantages and disadvantages are different.

New energy car insurance must be a big cake. According to an industry estimate, assuming Tesla's sales maintain a 31 per cent compound annual growth rate by 2030, annual sales could reach 11.52 million by 2030. According to the assumption of a neutral situation, Tesla can achieve global ownership of 60.46 million vehicles in 2030. If Tesla's insurance product coverage can reach 70% and the average annual premium per vehicle is 4800 yuan, the auto insurance business can achieve an income of 203.1 billion yuan.

However, the implementation of data still needs to be tested in practice. Tesla has been planning since 2016, launching the InsureMyTesla program in Australia and Hong Kong, China, to enter the insurance sector through cooperation with insurance companies in the model of insurance brokers.

In April 2019, Tesla acquired Markle Company of the United States and obtained an insurance broker license. His main business is underwriting and selling professional insurance products. In August 2019, Tesla launched an internal insurance plan in California, USA. The insurer is StateNational, premium, personal driving record, age, location and so on.

Tesla Insurance Brokerage Co., Ltd. landed in Shanghai in August 2020. In October 2021, Musk announced the launch of a new UBI car insurance product. Taking advantage of direct access to user data, Tesla's proprietary insurance costs about 20% and 30% less than traditional insurance companies, and can be purchased on a monthly basis.

According to CNBC, Tesla's insurance business now covers five states, including Arizona and Ohio, and Tesla will be able to insure 300000 cars by 2025. However, Tesla did not disclose his income in the insurance business at present.

Take the car insurance package of "Weilai Automobile" as an example. Lai Automobile has provided car owners with after-sales maintenance, scratch repainting, maintenance, maintenance, and other services. After insurance, users can complete the daily maintenance to repair to the purchase of surrounding products on the app.

According to an analysis of a medium-sized property insurance company, "for insurance companies, with sufficient experience and channel network advantages, data and pricing capabilities, as well as risk management capabilities may be more prominent." Of course, as the compensation rate of new energy vehicles is higher than that of traditional motor vehicles, the profit space of insurance companies is small, and the enthusiasm of underwriting is not high. "

According to the above research and analysis, for new energy vehicle companies, in the highly concentrated car insurance market, they need to form differential advantages in pricing, services and other aspects in order to get a piece of the pie. The entry of new energy car companies has triggered a catfish effect, forcing traditional insurance companies to speed up innovation.

However, in the huge blue ocean market, the new energy automobile insurance market is still in its infancy. The above-mentioned people believe that "new energy car insurance is an emerging market that the insurance industry must seize."

Zhang Lei, CEO of car Technology, told the Financial Associated Press that at present, the digitization process of car insurance in China is relatively shallow, and 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 by themselves, which will require a lot of time and capital costs. In addition, it is difficult to build a mature online system. "in general, the interfaces and underwriting rules of different companies in different provinces and cities are different, so it is difficult to connect with a large number of systems in a short time."

He also said that the era of new energy vehicles is not only an era for users to return to car companies, but also an era to reshape car insurance products. Cars will make use of their own technology accumulation and service network to help new energy enterprises share the opportunities and dividends for the development of "new energy car insurance".