Recently, many new energy car owners have reported that they have experienced a sharp increase in premiums or even been denied insurance when purchasing car insurance. Why are new energy vehicle insurance premiums more expensive? Regarding new energy vehicle insurance, how to solve the problem of “car owners complaining about high prices and insurance companies complaining about losses”? The reporter interviewed industry insiders.
How expensive is it to insure new energy vehicles?
"The main reason why new energy vehicles are currently expensive to insure is that the operating conditions of the entire auto insurance market in 2023 are relatively poor." Gao Yun, chief actuary of Zheshang Insurance, said that in fact, according to information exchanged among peers, new auto insurance in 2023 The combined ratio of the insurance policy is basically over 100%. "This data includes both new energy vehicles and fuel vehicles, which means that the new auto insurance business is no longer profitable, and the operating conditions of the new energy auto insurance business may be even worse." Gao Yun said.
The core factor why new energy car insurance does not make money is that the compensation rate is too high, and the high compensation rate is mainly due to the high accident rate. "Judging from the policy data of Zheshang Insurance in 2023, the accident rate of new energy vehicles is twice that of fuel vehicles. For example, the accident rate of compulsory traffic insurance for fuel vehicles is about 10 points, while for new energy vehicles it is more than 20 points. ." Gao Yun said that without considering other factors, new energy vehicle premiums must at least double on average to equalize the cost with fuel vehicles.
Why are the accident rates of new energy vehicles so high? First of all, new energy vehicles accelerate faster from the start. For some car owners who still retain the driving habit of fuel vehicles, the probability of traffic accidents is greater. Secondly, the accident rate of young people is much higher than that of middle-aged people, and young people account for a higher proportion of new energy vehicle owners. Finally, because the cost per kilometer of new energy vehicles is lower, many new energy vehicle owners who have registered as family cars will use online car-hailing services, but they are not insured as operating vehicles. As a result, insurance companies charge a lot less premiums. Therefore, many insurance companies will purchase additional third-party data to indirectly identify whether new energy vehicles are used for operations using indicators such as mileage.
In addition to high accident rates, the industry also generally believes that new energy vehicles are expensive to repair, which is related to factors such as the intensive application of new technologies (such as smart cockpits and smart driving), immature parts supply chains, and opaque maintenance plans. However, the situation may have improved now. Industry insiders from the insurance department of car companies said that from the after-sales maintenance data, the proportion of battery repairs is not high. Gao Yun told reporters: "From our company's data, after an accident, the average compensation paid by customers is not much different from that of fuel vehicles, but the high accident rate has led to high prices for new energy vehicle insurance."
Because there are more risk factors to consider in the pricing process of new energy vehicle insurance than for fuel vehicles, the premium price of new energy vehicle insurance is higher than that of fuel vehicles at the same price. "Even so, due to the upper limit of the auto insurance pricing coefficient, even if the price of some auto insurance reaches the 'limited price', the insurance company will still lose money." Liu Dan, head of the new energy vehicle and smart transportation industry at Munich Re China Innovation R&D Center, said that from a business perspective Look, insurance companies have to deny coverage for some business.
"Regulations have strict restrictions on the benchmark premiums of new energy vehicles. The extent to which auto insurance prices can be raised is far from covering the increase in the accident rate of new energy vehicles. It is basically a loss-making business. Therefore, most small and medium-sized insurance companies are not interested in this business. Love and hate, it’s painful to do or not to do it,” Gao Yun said.
Liu Dan believes that to solve this problem, it is necessary to strengthen cross-industry communication and cooperation. From the perspective of vehicle design, car companies need to enhance vehicle maintainability and ease of maintenance to reduce maintenance costs during accident repairs and reduce the part-to-unit ratio of new energy vehicles. From the perspective of vehicle intelligence, many parties should accelerate the implementation of intelligent driving technology, reduce the incidence of major accidents, and improve road traffic safety. "Only by effectively reducing the overall accident rate and maintenance costs of new energy vehicles can we fundamentally solve the problem of rising premiums and denial of insurance coverage," Liu Dan said.
The industry looks forward to liberalizing innovation mechanisms
Recently, regulatory authorities have repeatedly issued documents on the issue of high costs and prices of new energy auto insurance, including rectifying industry rates and requiring no one-size-fits-all policy denial. For example, in September 2023, the State Administration of Financial Supervision issued the "Notice on Strengthening the Management of Auto Insurance Expenses", which requires comprehensively strengthening the internal management of auto insurance premiums, continuing to improve the market-based formation mechanism for commercial auto insurance premiums, and comprehensively strengthening the management and control of commercial auto insurance premiums. "Unity of reporting and action". In January 2024, the State Administration of Financial Supervision issued the "Notice on Effectively Doing New Energy Vehicle Insurance Underwriting Work", requiring that compulsory traffic insurance shall not refuse insurance, and commercial insurance shall be fully insured; Unreasonable underwriting restrictions such as "one size fits all" are adopted for specific new energy vehicles, and unreasonable assessment targets for new energy vehicle insurance are adjusted. Industry insiders believe that under the current situation, large insurance companies should show more responsibility and responsibility and temporarily sacrifice part of their profits to underwrite new energy vehicles. However, from the perspective of the long-term development of the industry, the problem of "car owners complaining about high prices and insurance companies complaining about losses" requires more long-term and radical solutions.
"Currently, the product liability and floating price range of all new energy auto insurance policies are the same," Gao Yun said. At the end of 2021, in order to meet the insurance protection needs of new energy vehicle consumers, the Insurance Industry Association of China released the "China Insurance Industry Association New Energy Vehicle Commercial Insurance Model Clauses (Trial)". Thereafter, all new energy vehicle insurance products developed by insurance companies, such as coverage types and rates, must operate within this model clause.
With the rapid development of new energy vehicles in my country, insurance products that have just started to be explored are gradually exposed to new problems, and rigid model clauses are gradually unable to meet the diverse risk protection needs of consumers. Many industry insiders expressed the hope that regulatory authorities will carry out some targeted innovation and exploration in the field of new energy auto insurance to further enhance market vitality, enrich the supply side, enhance customer experience, and help auto insurance enter a new stage of development.
"Innovation has many dimensions. For example, in terms of liability protection, insurance companies can be allowed to set their own insurance coverage; in terms of charging models, UBI auto insurance (insurance priced based on driving behavior) can be developed and charged according to mileage. Insurance companies We should make great efforts to innovate, force the industry to develop according to customer needs, solve the problem of expensive insurance for new energy vehicles through market mechanisms, make products with heart, and attract customers with quality, thereby promoting the high-quality development of the insurance industry." Gao Yun said.
New energy vehicles naturally have rich driving behavior data, and a large amount of data is an important factor for insurance companies to achieve accurate pricing. Therefore, in theory, new energy vehicle insurance should have the inherent advantage of rich data. However, the fact is that it is difficult for insurance companies to obtain new energy vehicle driving behavior data. Industry insiders expect to promote the commercialization of driving behavior data from the policy level, or fully utilize data resources through other methods to solve the current prominent contradiction in pricing of new energy vehicles.
Chen Donghui, the former president of Swiss Re China, believes that completely separating the auto insurance for family cars and online ride-hailing cars, allowing premiums to correspond to risks, and supervising different businesses is the only way to solve the operating difficulties of new energy auto insurance. If we ignore the difference between home use and operation, and uniformly follow the current product rates and do not allow price increases, not only will it not be able to solve the operating difficulties of new energy car insurance, but it will also significantly increase the premium burden for real family car owners, because they will also have to share the burden. Insufficient premiums for ride-hailing services.
"The current high accident rate is due to the high proportion of online car-hailing services. After new energy vehicle owners have passed the unadaptation period to driving electric vehicles, the accident rate of new energy vehicles for family use will drop significantly. And the case The high average compensation is mainly due to the young age of new energy vehicles, high vehicle prices, and expensive accessories. It is worth noting that collision consumable parts account for a relatively high proportion of claims costs, and their compensation costs exceed batteries. This situation is also true for online ride-hailing services. Driven by the high proportion of accidents. As the prices of spare parts and supporting specifications for repairs gradually mature, the average compensation case of new energy vehicles for household use will also decrease." Chen Donghui said.
"The ideal state is to charge based on driving mileage and driving behavior, and completely distinguish between household and commercial vehicles, but this will cause the premiums for online car-hailing drivers to be too high and unaffordable." Chen Donghui believes that under the current situation, the independent pricing coefficient of new energy vehicles should be completely liberalized The corresponding conditions are not yet met. However, on the basis of moderately liberalizing the independent pricing coefficient of new energy vehicles, we can explore ways to encourage online car-hailing platform companies and online car-hailing car owners to jointly bear car insurance premiums, so that the platform can provide contracted online car-hailing companies with the excess over the premiums for family cars. As a necessary condition for online ride-hailing operations. This not only solves the problem of premium adequacy, but also ensures that the premium is not fully borne by online ride-hailing drivers.
Automobile companies cross borders to stimulate more potential
The good news is that new energy car companies have taken a fancy to the huge development potential of new energy car insurance and have begun to enter the insurance industry. In November 2023, BYD Property & Casualty Insurance received approval from the State Administration of Financial Supervision and Administration, agreeing to add "motor vehicle insurance" business, including compulsory motor vehicle traffic accident liability insurance and motor vehicle commercial insurance; BMW (China) Insurance Brokerage Co., Ltd. also received approval. Licensed to operate insurance brokerage business.
In recent years, domestic car companies have entered into the insurance business across industries. Weilai, Ideal, Xpeng, Leapmotor, BYD and other car companies have all established their own insurance brokers or agencies. From an international perspective, Tesla, which was the first to promote UBI auto insurance in the market, is still in the stage of exploring and adapting. It is reported that in the first nine months of 2023, Tesla insurance suffered a loss of US$16 million; at the same time, Tesla owner premiums dropped by about 30%.
In this regard, Chen Donghui believes that regulatory authorities can give leading car companies a "regulatory sandbox" to encourage car companies and insurance companies to boldly explore innovative iterations of new energy auto insurance. For example: fully digital car insurance, full-process door-to-door service instead of cash compensation, green car insurance that charges based on driving behavior, purely direct-selling car insurance, productization of value-added services, etc. "Attempts in these aspects may make the innovation of new energy auto insurance at the forefront of the world, matching the status of my country's new energy vehicles in the world; it may also completely change the customer experience of auto insurance, thus changing consumers' attitude toward new energy auto insurance. negative impression." Chen Donghui said.
"When car companies enter the insurance industry, they will not be able to establish complete insurance operation capabilities overnight." Liu Dan said that car insurance operations are a complex system engineering, although car companies naturally have vehicle design parameters, vehicle operation data, customer contact points, etc. Advantages, but new energy auto insurance involves professional fields such as product design, pricing, sales, customer operations, claims, and risk control. This requires car companies to have an objective understanding of the role of car insurance in the life cycle of car customers. "Insurance is an important starting point for improving user stickiness and after-sales output value."
"Similarly, the insurance industry also needs to further support the product innovation of new energy auto insurance, and strengthen the supply of UBI auto insurance, vehicle-battery separation insurance, autonomous driving insurance and other products on the supply side. Currently, all forces in the insurance industry are actively deploying the new energy auto insurance field Munich Re has also set up a dedicated team in China to be responsible for insurance innovation in the travel industry, providing solutions for the insurance industry from the perspective of big data application, risk pricing and reinsurance." Liu Dan said.
Yang Ran
(Economic Daily)