On January 19, NIO Insurance Brokerage Company was officially established. The company is 100% owned by NIO Holdings Co., Ltd. with a registered capital of 50 million yuan. The business scope includes insurance brokerage business; insurance agency business; concurrent insurance agency business; insurance assessment business, etc. Of course, the company is still in the registration stage, and some businesses require approval from relevant departments before they can operate.
Nio’s move comes less than a month after the exclusive insurance for new energy vehicles was launched on December 27, 2021. It can be said to be quite quick. In this regard, Weilai officials stated that this measure is a preparation to provide users with a better service experience in the long term. Rather than saying it is preparation, it is better to say that NIO has been "planning" to enter the insurance business for a long time.
Let’s first learn about car insurance. In China, there are four types of licenses: life insurance, health insurance, pension insurance and property insurance. Most of the business scopes of the first three types of licenses actually overlap. They can be considered to be the same type, that is, the personal insurance license, and the other is the property insurance license. Insurance brokerage is a type of insurance intermediary (an insurance company requires a registered capital of 200 million yuan) Above, insurance intermediary companies need 50 million yuan). Car insurance is a type of property insurance. An insurance license is a financial license issued by the China Banking and Insurance Regulatory Commission that allows the license holder to operate the insurance business legally and compliantly. That is, only the institution holding the financial license can operate the insurance business legally and compliantly.
In fact, as early as 2012, the China Insurance Regulatory Commission issued the "Notice on Supporting the Professional Operation of Automobile Enterprises' Agency Insurance Business" to encourage and support automobile enterprises to invest in the establishment of insurance agencies and insurance brokerage companies. Or cooperate with existing insurance agents and insurance brokers, and the insurance agents and insurance brokers will coordinate the development of automobile insurance business. In other words, at the policy level, car companies have long been encouraged to engage in insurance business themselves.
In recent years, with the continuous increase in the penetration rate of new energy vehicles, new energy auto insurance undoubtedly has huge market potential. According to insurance industry data forecasts, it is expected that by 2035, the annual premium of new energy auto insurance will increase to about 200 billion yuan.
Obviously, NIO is not the only one who understands this.
1. They are all earlier than Weilai
In fact, before Weilai, there were car companies such as GAC, SAIC, Geely, and Xiaopeng that laid out the auto insurance business.
Zhongcheng Auto Insurance, initiated by Guangzhou Automobile Group and other companies, was established in 2011 with a registered capital of 2.26875 billion yuan. It is the first domestic insurance company A professional auto insurance company listed on the New OTC Market. Its business scope is mainly auto insurance, covering Auto insurance, corporate property insurance, engineering insurance, liability insurance and other property and casualty insurance businesses; SAIC Motor Insurance Sales Co., Ltd. was established in 2015 with a registered capital of 200 million yuan. It is a national insurance company jointly established by SAIC Group, SAIC-GM and SAIC-Volkswagen. Professional agency, focusing on creating exclusive brand insurance for key modelsInnovate insurance products in and related fields, leverage the synergy advantages of SAIC’s financial sector, and provide automobile insurance + car owner services.
In 2018, eBaoTech Insurance, a wholly-owned subsidiary of Geely Holding, was approved to operate related insurance agency business. It mainly provides car owner services based on the "Cheyoubao" Internet of Vehicles platform for car owners of Geely's six major brands. The system provides services such as policy inquiry, case reporting, and product purchase. In addition, Geely invested in the auto insurance business last year by holding 133 million shares of Hezhong Property & Casualty Insurance (Hezhong Property & Casualty Insurance was established in 2015, and the auto insurance business accounted for more than 90%), with a shareholding ratio of 33.33%. It received a Property insurance license.
Among the new car-making forces, Xpeng Motors took the lead in establishing Guangzhou Xpeng Automobile Insurance Agency Co., Ltd. in 2018 and was approved to carry out automobile insurance agency business.
It is worth noting that Tesla acquired the American Markel Corp in 2019 and obtained an insurance brokerage license; in 2020, it established an insurance brokerage company in Shanghai, owned by Tesla Motors Hong Kong Co., Ltd. The company is 100% owned; in October last year, Tesla CEO Elon Musk announced that he would launch an exclusive auto insurance service based on drivers’ real-time driving behavior, called UBI (user behavior-based insurance), in order to It has advantages in car owner services and data collection.
Guo Zhenhua, director of the Insurance Department of Shanghai University of International Business and Economics, once said, "For automobile companies, if they obtain an insurance intermediary license or a property insurance company license, on the one hand, both parties can consider how to operate through the automobile sales network. Make the auto insurance business bigger Strong; on the other hand, in view of the future development direction of the automobile field, both parties can explore and innovate new fields of automobile insurance.”
It is not just automobile companies that have entered the automobile insurance business, but also new energy with a market value of more than one trillion yuan. CATL is also making plans in this field. In July last year, Sino-French Life Insurance officially changed its name to Xiaokang Life Insurance Co., Ltd., and its registered capital increased from 200 million yuan to 3 billion yuan, of which CATL held 30% of the shares and became the second largest shareholder. Ningde Times has said that investing in insurance companies is to match the company's long-term funds with the battery bank and energy storage operations that the company plans to promote. It is one of the ways for the company to build a foundation for business model innovation. Then in October, CATL reached a cooperation with PICC Property and Casualty Insurance Co., Ltd. to focus on the new energy vehicle aftermarket, promote the sales of new energy vehicles, power batteries and related insurance products, and improve the service experience of new energy vehicle users.
2. Is the auto insurance business “losing money and making money”?
Although car companies have entered the auto insurance business in different forms, the profitability of these insurance companies does not seem to be optimistic.
As mentioned earlier, Zhongcheng Insurance, which was funded by GAC, had revenue of only 20.48 million yuan and a loss of 40.13 million yuan in the year of establishment. By 2017, revenue had reached 1.2 billion yuan and a loss of 42.96 million yuan. yuan; in the first half of 2018, it was still in a state of loss, but the extent of the loss narrowed. The net profit attributable to shareholders of the listed company was a loss of 12.0651 million yuan.. After six and a half years of losses, Zhongcheng Insurance achieved profitability.
Hezhong Property & Casualty Insurance has never gotten out of the loss cycle since its establishment. The total loss from 2015 to 2019 exceeded 200 million yuan, and in 2020, it once again suffered a net loss of 50.81 million yuan.
Xpeng’s situation is different. Because it does not use the car insurance business of Xpeng’s partner institutions, it can only provide claims settlement and exclusive insurance renewal services that affect the implementation of OTA upgrades, and has been complained by car owners.
It is understood that the Property and Insurance Supervision Department of the China Banking and Insurance Regulatory Commission issued the "Notice on Matters Concerning the Registration of Exclusive Products for New Energy Vehicles" to all Banking and Insurance Regulatory Bureaus and property insurance companies last year, requiring new energy vehicle commercial insurance The surcharge rate for exclusive products shall not be higher than 15%. This means that the cost space that insurance companies can use when underwriting new energy vehicles has become smaller, and cost reduction has become the rule of survival for insurance companies, followed by a reduction in the commissions of auto insurance salesmen.
According to a salesperson from an insurance company, for a policy with a premium of more than 2,400 yuan, the car owner only needs to pay more than 1,500 yuan after the discount, while the salesperson’s commission is only a few dozen yuan.
Based on the above reasons, after the new energy exclusive car insurance was launched on December 27 last year, consumers found that the premiums for new energy vehicles had increased.
Commercial auto insurance premiums currently mainly consist of two parts: commercial auto insurance premiums = base premium × rate adjustment coefficient. In terms of benchmark premiums, compared with traditional auto insurance, overall the benchmark premiums of new energy exclusive auto insurance and third-party insurance dropped by 0.1%, and the benchmark premiums of auto damage insurance dropped by 1.2%. The combined decline of the two was about 0.8%.
Specifically, new energy vehicles with a vehicle price of less than 250,000 yuan are guaranteed to have no increase in the benchmark premium for vehicle damage insurance; while increases in the benchmark premium of new car-making forces led by Tesla are more common. , the main reason is that maintenance costs, core components and spare parts prices are higher, and the compensation cost of this type of vehicle is higher.
This resulted in insurance companies not making money in the original auto insurance business. However, after the launch of exclusive new energy vehicle insurance, the insurance scope of the three-electric system was clarified and the types of insurance increased, causing the insurance price to rise. The car owner felt it was not worth it.
Cui Dongshu, secretary-general of the Passenger Car Association, issued a statement saying, “The introduction of new energy vehicle insurance is a good thing, but the cost increase is high. The gas money saved by using new energy vehicles may have to be used to pay for insurance. , causing new energy vehicles to seem uneconomical, forming a 'buy it' The phenomenon of “cannot afford to use” is not conducive to the promotion of new energy vehicles. Therefore, car companies must establish their own insurance varieties, the industry must have more accurate insurance calculations, and the state must support reasonable subsidies for insurance costs.”
3. Why does Weilai still do it?
In the opinion of analysts in the insurance industry, the adjustment of new energy exclusive car insurance premiums is not expected to have a negative impact on the sales of new energy vehicles, mainly because the maintenance costs and driving energy consumption of new energy vehicles are relatively high. Traditional cars have certain advantages, and the adjustment of premiums will not affect the comprehensive price advantage of new energy vehicles; secondly, new energy exclusive car insurance achieves differentiated premiums and controls price sensitivity.The insurance cost and premium adjustment for car owners will not affect the car purchase choices of this group of consumers.
In addition, new energy exclusive car insurance solves the contradiction between insurance companies and new energy car owners in terms of insurance liability definition to a certain extent, and can provide car owners with more comprehensive and high-quality protection services. The increase in the ownership rate of energy vehicles will bring more insurance policies, forming a virtuous cycle.
If this is the case, then the entry of new energy car companies into the auto insurance business will inevitably reduce car owners’ car purchase costs at a comprehensive level. Under the premise of the same insurance items, which company has cheaper premiums, or at the same premium level? In this case, more services will be provided to attract users.
After the launch of new energy exclusive car insurance, NIO plans to launch the worry-free 2022 version of services in March this year: 1. The pricing of the worry-free package for new purchased services remains unchanged, and it also includes new terms and new Three additional insurances (external grid failure loss insurance, loss insurance for self-use charging piles and liability insurance for self-use charging piles); 2. Users who are still within the service period of Wuyou 2021 version do not need to purchase three additional insurances with new terms. The current Wuyou services will include Corresponding protection content; 3. Insurance The worry-free pricing is still the insurance fee + 1,680 yuan for NIO’s exclusive services, retaining the core services such as repainting, basic maintenance, car pick-up and delivery, door-to-door tire repair, transportation services and accident peace of mind. The changes in the overall premium are related to the user Region, violation record , past accidents and other factors; 4. For users who are still within the service period of the 2021 version of the insurance, the accident claim rights and experience are no different from those of the new terms of the main insurance; 5. Car owners can choose the service according to their own car usage. Worry-free or worry-free insurance products.
Car insurance agents may not make money, but they can attract users. The auto insurance business allows user-oriented enterprises like NIO to directly connect with C-end users, extend the car service cycle of NIO car owners, increase business growth space, and thereby establish an ecosystem around new energy vehicles.
Written at the end: Car insurance is the first service product that consumers come into contact with when buying a car. If car companies use the car insurance direct sales model to directly face end consumers, then vehicle delivery will become the car company’s first step in providing consumers with services. From the beginning of car service, with car insurance as the starting point of service, more new service models such as the aftermarket and car owner's rights can be developed. In this way, it can not only improve consumer service satisfaction, but also bring more revenue to car companies. At the same time, it is supported by incentive policies. Why not NIO?
