Securities Times reporter Pan Yurong
New energy vehicles are the darling of the market, but their car insurance is full of complaints: car owners are dissatisfied, insurance companies are dissatisfied, and car companies are also dissatisfied.
At present, for every 4 new cars sold in China, 1 is a new energy vehicle. When consumers get the car and get insurance, they often feel "pricked": a new car of about 20,1 yuan, the insurance premium is nearly 80,<> yuan, which is much higher than that of fuel vehicles. The average premium of new energy vehicle insurance is about <>% higher than that of fuel vehicles.
Premium is the pricing of risk. Because the risks are not clear, the data is difficult to obtain, and the management is not grasped, insurance companies have paid a lot of tuition fees on new energy vehicle insurance, and they still can't estimate the profit time.
Some car companies find that old-fashioned and conservative insurance companies always seem to be unable to cooperate with their own risk transfer, so they do insurance themselves to find solutions.
The motor insurance market is on the eve of change. According to the schedule of the new round of comprehensive reform of motor insurance, the floating range of the voluntary pricing coefficient of commercial auto insurance will be expanded from June 6 this year. What kind of chain reaction will be triggered by pricing fluctuations, and whether new energy vehicle insurance premiums will rise or fall, have become the focus of attention of many parties.
"New energy anxiety" in the auto insurance industry
The SAIC Training Center located on Tongjia Road on the North Bund in Shanghai is one of the coordinates of the "North Bund Shanghai Industrial Road". Since the 80s of last century, SAIC Training Center has been an important training base for middle and senior engineers of SAIC.
On the first floor of Building No. 4 of SAIC Motor Training Center is the training room for new energy vehicles, which displays various new energy vehicles, as well as disassembled motors, cells, battery modules, and chassis of various structures.
On this day, the classroom was crowded. The training was provided by "old car insurers" with rich experience in underwriting, claims settlement and channel positions of major domestic insurance institutions, and they were the first batch of trainees of the new energy car insurance exploration camp led by the insurance public welfare organization "Cha Dao Yancomb".
The first thing everyone did when they stepped into the training room was to take off the metal pendant on their hands to prevent electric leakage. An electric vehicle battery module used by SAIC engineers to demonstrate was disassembled a few years ago and has not been charged for many years, and the residual voltage is still 84 volts, far exceeding the human safety voltage of 24 volts. The risks of new energy vehicles are all around us.
In 2022, the share of new energy vehicles in the new vehicle sales market will be 24.7%, which is already impossible for insurance companies to ignore. However, in the past years, the new energy car insurance business has been a big stone on the chest of insurance companies - the loss rate is high, and the real money is lost every year, and there are always risks that are undercalculated.
Because of insufficient understanding of the three electric technologies and maintenance processes of new energy vehicles, insurance companies that are suffering from the difficulty of managing claims costs seize the opportunity to "learn from the technical personnel of car companies":
- Which models best address the risk of vehicle explosion?
——I came across a battery claim case, we sent the battery to a third-party company for testing, the other party said that it would be okay to replace the individual components that were damaged, but the car company said that it would be replaced in a whole package, is there a solution to this kind of case?
——How many millimeters of cracks in the chassis of new energy vehicles need to be replaced? What if the customer doesn't know when it hits?
INTERVIEWER What are the recycling routes after battery replacement? How much does it pay for itself?
The one-hour presentation session was extended to two hours, and the questioners were still unsatisfied. Some trainees lamented, "If we don't know a little technology, it is too easy to be fooled by the repair shop when making a claim." ”
The cost and risk game of new energy vehicles
Technological innovation is risky, and the cost of risk, how to share it between car companies, insurance companies and consumers, is a deeper game.
There are huge differences between new energy vehicles and fuel vehicles in terms of drive principle, parts layout, and maintenance methods. Over the years, insurance companies have paid a lot of tuition fees in the payment of new energy vehicle insurance.
Ma Tao, CEO of Jingyou Technology, a leading domestic claims and loss assessment platform, said that most of the core components of new energy vehicles, the charging motor, are located in the front of the body, and in the event of a collision, the maintenance cost is often higher than that of fuel vehicles. On the front and rear bumpers, side mirrors, headlights and other wearing parts of new energy vehicles, there are many sensors, cameras, millimeter-wave radar or lidar and other accessories, each of which is worth a lot. According to Ma Tao, models with lidar have twice the risk loss than other models; The replacement cost of parts for new energy vehicles is twice that of conventional vehicles.
In addition, batteries account for 40% of the cost of new energy vehicles, and the high cost of battery repair is also a major pain point. In recent years, in order to reduce production costs, car companies have adopted integrated die-casting (CTC) technology to reduce the number of parts and improve the density of fuselage batteries. Taking the best-selling Tesla Model Y as an example, the CTC one-piece die-casting can reduce the weight of the lower body assembly by 30% and the manufacturing cost by 40%.
After Tesla, brands such as Xpeng, NIO, and Changan also followed the technology. BYD recently adopted battery-body integration technology on the high-end model Seal.
The cost reduction strategy implemented by new energy vehicle companies on the manufacturing side has brought about a sharp increase in the maintenance cost of the sales end. For example, the entire rear body structure of Tesla Model Y is integrated, and once a certain part is damaged, it often needs to be replaced as a whole; Because the battery is embedded in the body, once a small crack appears after the collision, the entire chassis must be replaced, and the repair cost can cover most of the price of the car.
In addition, insurance companies have also covered some losses caused by improper BMS (battery management system) strategies for new energy vehicles or quality defects in charging piles. These losses are directly reflected in the claims costs of insurance companies, and indirectly shared by new energy vehicle owners through the increase in premiums.
At present, the official has not released data such as the premium and loss rate of new energy vehicle insurance, and the reporter learned from the industry that in 2022, the insurance company's new energy vehicle insurance premium income will be about 650 billion yuan, the number of commercial insurance signed will be 1118.4139 million, and the average premium will be 4953 yuan; In terms of compensation, the average compensation in the case was 2022,<> yuan. Through the analysis of industry data, the insurance industry generally believes that the car insurance loss rate in <> is lower than that of previous years.
"Last year, the compensation of new energy vehicle insurance was lower than in previous years, which was a fluke, not because the insurance company managed the risk well, but because of Omicron." Xie Yue, founder of Cha Dao Yan Comb, who has served as an executive at a number of property insurance companies, said, "Due to the epidemic, car owners have reduced their travel, resulting in a lower loss ratio. This year will be very different. ”
Liao Jianguang, president of Beijing Insurance Service Center, mentioned in a sharing that in 2021, the loss rate of new energy vehicle insurance will be 90%, which is about 21 percentage points higher than that of the overall industry car insurance, and the loss rate of some small and medium-sized insurance companies exceeds 100%. Among them, the risk rate of household new energy vehicles is 9.3 percentage points higher than that of traditional oil vehicles, and the risk rate of rental and leasing new energy vehicles is 14 percentage points higher than that of traditional oil vehicles.
"We're not afraid of losing money, but we need to know how much we're going to lose." An insurance company source said. Strategic losses are acceptable for insurers, but it is important to know where they are losing money and for how long.
Reinsurance is one of the means for insurance companies to diversify risks, but because the reinsurance market also believes that "new energy vehicle insurance is a high-risk business", it is difficult for insurance companies to reinsure and also limit the "risk-taking spirit" of insurance companies.
To "risk" and keep profits, insurance companies choose to bear part of it themselves, and "raise prices" to transfer a part. In December 2021, the exclusive provisions for new energy vehicle insurance began to be launched. Soon, some car owners found that the price of new energy vehicle insurance premiums increased. Insurance companies have increased prices for some car owners by repricing the risks. There are also insurance companies that simply refuse high-risk businesses, which brings a bad experience to car owners.
The invisible "data wall"
If insurance companies want to accurately recognize risks and control costs, they cannot do without data.
China has the world's largest new energy vehicle monitoring and management platform, which is divided into national monitoring platform, local monitoring platform and enterprise monitoring platform (mainly car companies).
According to the requirements of the Ministry of Industry and Information Technology, new energy vehicles must be equipped with on-board terminals, monitor and manage the operation safety status of key systems such as vehicles and power batteries through the enterprise monitoring platform, and upload the relevant safety status information of vehicles in the public service field to the local monitoring platform in accordance with national standards. In addition, the enterprise monitoring platform should also set up the interface of the national monitoring platform and accept the supervision and random inspection of the national monitoring platform. Currently, the data upload frequency is once every 30 seconds.
The reporter saw in the Shanghai New Energy Vehicle Public Data Collection and Monitoring Research Center that the platform collected more than 100 static and dynamic vehicle information within the scope of the national standard, and the center can monitor the vehicle location, battery health, and charging status in real time when the procedures are complete. On this monitoring platform, the access rate of new energy vehicles in Shanghai exceeds 99%, and the number of access vehicles exceeds 100 million.
Beili Xinyuan (Beijing Polytechnic Xinyuan Information Technology Co., Ltd.) is a national platform for big data monitoring of new energy vehicle insurance in China, and as of early January 2023, more than 1.1216 million vehicles, 329 enterprises and more than 8400,<> models have been accessed.
Big data infrastructure makes it possible to share and co-build new energy vehicle data, and also gives insurance companies the foundation for precise risk control. However, there are also invisible walls between subjects around the use of data.
For data cooperation, insurance companies, car enterprise monitoring platforms, and big data monitoring platforms are very cautious. For the three parties, data is a core asset, and issues such as how to export data safely and cheaply, and how to retain data need to be solved step by step.
"The cooperation with the data platform is mainly an attempt at the head office level, and the branch does not have the conditions and motivation to do this." Pang Bo, head of Big Wisdom Insurance, told reporters. Provincial branches are the most important cost control unit of car insurance, and "both premiums and profits" are balanced at this level, and the tolerance for losses is also the lowest - if there is a loss, everyone's bonus will be affected. Under strict cost control, purchasing data is not realistic for branches. "Unless the head office pays another share, the new energy vehicle insurance business will be assessed separately." Pombo said.
There is also a process for the running-in of insurance companies and car companies. An example is that an insurance company cooperates with a car company to try to embed insurance into the car company service platform, and as the project gradually progresses, when it comes to the payment link, the car company puts forward a request, and the color tone of the payment page needs to be consistent with the color tone of other pages on the platform, but the insurance company feedback that the payment interface cannot be modified. Because of this "small" disagreement, cooperation was put on hold.
Pang Bo explained that in 2022, the market share of new vehicle sales of new energy vehicles will be 24.7%, but in the stock market, new energy vehicles still account for less than 6%, for the entire auto insurance sector, it is difficult to mobilize higher-level resources for a business of this magnitude. "Small insurers may be more flexible."
Car companies go head-to-head
Insurance companies and car companies have been "dissatisfied with each other" for a long time. Car companies believe that insurance companies are too conservative and do not have a sense of risk-taking, "this can't work, that can't work", and the process is rigid; Insurance companies, on the other hand, believe that there are too many unknown risks of new energy vehicles, insurance companies cannot get data, and they cannot price if they cannot see the risks. Insurance is an industry that makes a living from risk diversification, and it must insist on accounting operations.
"If you're all targeting Tesla, I'm going to open my own insurance company." In 2021, Tesla CEO Elon Musk stated that Tesla wants to do its own insurance, because Tesla's premium is higher for the same price model, making Musk think that he is targeted.
Tesla kicked off the entry of car companies into the insurance industry. At the beginning of 2023, the news of BYD's intention to acquire Yi'an Insurance was confirmed, and new energy vehicle companies were deeply involved in the insurance industry and had a domestic version.
In fact, new automakers that have always placed user experience in an important position, such as Lili and NIO, are very concerned about the premiums of their products, and regard low premiums as evidence that the outside world evaluates the safety of their vehicles. Xpeng Motors has borne a lot of pressure due to the high insurance premiums of car owners. In recent years, car companies such as NIO, Xpeng, Lili, and Leap have also established their own insurance brokers or agency companies.
Can car companies personally go down to do insurance, can they tear down the invisible wall that hindered cooperation in the past? Especially in data sharing and accurate pricing, what will be the changes?
Let's see how Tesla does it. In 2021, Tesla launched UBI (usage-based insurance) insurance, which integrates data such as drivers' driving habits, driving technology, vehicle information and surrounding environment through Tesla's own on-board networking equipment, and establishes a multi-dimensional model of people, vehicles, and roads (environment) to price the owner's insurance.
UBI makes car insurance pricing "person-specific," unleashing the value of data. However, China has not liberalized UBI auto insurance products, and insurance companies and car companies still need to explore other ways of cooperation.
According to the analysis of the actuarial department of a large domestic property insurance company, Tesla does insurance in order to eliminate the friction costs and inefficiencies inherent in the traditional insurance process and enhance the user experience throughout the policy life cycle; The second is to hit the market with low premiums, so that other insurance companies cannot raise the premiums of Tesla owners too much and improve the user experience. Not long ago, Tesla also revealed that the company is trying to reduce unreasonably high maintenance costs by entering the insurance field.
At the end of last year, Tesla's insurance business had annual premiums of $3 million and is growing 20% every quarter. Tesla disclosure data shows that Tesla Insurance's loss rate in 2022 is around 99%. In other words, Tesla is using insurance losses in exchange for an improvement in the overall user experience.
Car companies go down to do insurance, some people think that it is not so simple, the typical representative is Buffett. Buffett believes that "car companies entering the insurance business may have about the same success rate as insurance companies entering the auto business." "Berkshire Hathaway has been in property insurance for many years and understands the complexities of insurance.
The latest data shows that an average of 17% of Tesla's customers in the states in which the U.S. operates use Tesla insurance products. This progress is obviously far lower than Musk's vision in 2021. In the future, how long Tesla will lose money on car insurance is still unknown.
Convergence usheres in the era of autonomous driving
When car companies and insurance companies are still "fighting" for data attribution, who integrates into whom, a new era has arrived.
Wu Baojun, co-founder, director and president of Leapmotor, has worked for Honda Toyota for more than 20 years and Zhongcheng Insurance for 8 years, successively serving as president and chairman. In 2020, he entered the new energy automobile industry. This experience has made him the "most insurance-savvy automaker" and "the most car-savvy insurer" in the industry.
Wu Baojun believes that many car companies will make technological breakthroughs in autonomous driving in 2023. "What is about to happen is that electric vehicles will enter the era of intelligence. Cruising range will no longer be the most concerned indicator, intelligence is competitiveness. ”
For the impact of autonomous driving on the insurance industry, Wu Baojun believes that it is mainly manifested in the iteration of technology leading to changes in risk patterns. In the past, insurance was priced based on historical accident data, but in the future, risks that have occurred will be quickly solved through system upgrades, and insurance companies and car companies will face unknown risks that have not yet occurred.
Unknown risks are inevitably coming, becoming the common enemy of insurance companies and car companies, and also ushering in the opportunity for integrated development of the two.
"It is an inevitable trend for car companies to deeply participate in insurance, because insurance and automobiles are strongly bundled, which is the golden entry point for car company user operations and the best executor of UBI car insurance." Wu Baojun said that car companies need to connect users with car insurance as a link and combine data technology to achieve product innovation.
"Along the old map, the New World could not be found. In the face of the challenges of new forces in car manufacturing, insurance companies should take the lead in how to reformulate products, pricing and sales strategies, build a cooperation link between themselves and car companies, and actively integrate into the new energy vehicle ecological chain. Wu Baojun said that with the approach of autonomous driving, there is great hope for the transformation of car insurance into liability insurance in the future, and insurance companies and car companies have a lot of cooperation space in actuarial model co-construction and automatic driving liability insurance development.
Chen Zhijian, head of the actuarial department of Ping An P&C Insurance, said that no matter how the world changes in the future, the core capabilities of insurance companies are to recognize risks, settle accounts and operate, and do a good job in refined management.
According to the Notice on Expanding the Floating Range of the Voluntary Pricing Coefficients of Commercial Motor Insurance and Other Related Matters issued by the China Banking and Insurance Regulatory Commission not long ago, on June 6 this year, the floating range of the voluntary pricing coefficients of commercial motor insurance was expanded from 1.0~65.1 to 35.0~5.1. According to past experience, after the coefficient floating range is expanded, the overall car insurance premium will decrease. Will this experience happen with new energy bodies?
Most insurance companies interviewed by reporters believe that the current risk of new energy vehicles is still there, the pressure of insurance companies to lose money still exists, and after the floating range is expanded, it is difficult to reduce prices consistently. However, companies may increase their differentiation in premium pricing for different models and owners.
As for when the "premium assassin" of new energy vehicles will disappear, it may have to wait until the risk factors of new energy vehicles are gradually eliminated.
For example, the proportion of ride-hailing vehicles in new energy vehicles is significantly higher than that of fuel vehicles. Due to the high risk coefficient of online ride-hailing, it should be classified as an operating vehicle, but the insurance company's differentiation of online ride-hailing is not enough, so that the cost of insurance is shared by all new energy vehicle owners.
For example, the maintenance system of new energy vehicles is not developed enough, whether it is the price of spare parts or the cost of working hours, which leads to the high cost of claims per case, which affects the insurance premium.
For example, at present, the distinction between good car owners and bad car owners is not high, in the future, with the use of big data, the use of insurance premiums to stimulate and guide car owners to improve driving behavior will reduce the odds and reduce the premiums of most people.
However, a consensus between car companies and insurance is that when cars are more intelligent and autonomous driving is covered in a large area of the city, the vehicle accident rate will decrease, the loss rate will decrease, and the insurance premium will be reduced. Although, this day will not come all at once.