New Energy Vehicle Companies Enter Insurance Industry

Since the beginning of this year, many Chinese new energy vehicle companies have entered the insurance industry by acquiring or setting up insurance brokers. Some experts have pointed out that new energy vehicle manufacturers can make use of their own information advantages to reduce auto insurance premiums and improve their competitiveness.

According to commercial inquiry platform Tianyancha, the shareholders of Yinjian Insurance Brokerage Company have changed recently, and the original shareholders have withdrawn. The company is wholly-owned by Chehejia Financial Technology (Jiangsu) Co., Ltd. It is shown that the business scope of Yinjian includes drawing up insurance plans for applicants, selecting insurers, and going through insurance procedures. Chehejia Financial Technology (Jiangsu) Co., Ltd. is a subsidiary of Beijing Chehejia Automotive Technology Co., Ltd., and the brand of Beijing Chehejia is Li Auto. In other words, Li Auto has obtained insurance broker licenses.

In fact, new energy vehicle companies have been entering the insurance market for a long time, and this year they have made a lot of decisions. In July 2018, XPeng Motors registered and established Guangzhou XPeng Motors Insurance Agency Co., Ltd. In August 2020, Tesla registered and established Tesla Insurance Brokerage Co., Ltd. In January this year, NIO Insurance Broker Co., Ltd. was established. In March, BYD Insurance Brokerage Co., Ltd. was established.

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Car companies have entered the market one after another and competed for the new energy vehicle insurance market. The New Energy Vehicle Industry Development Plan (2021-2035) points out that by 2025, the sales of new energy vehicles are expected to make up about 20% of total new car sales. In December 2021, exclusive car insurance for new energy vehicles was officially launched. While the guarantees increased, the premium increase of some brands was ridiculed. Cui Dongshu, Secretary-General of the China Passenger Car Association, issued a document in January this year suggesting that car companies should be encouraged to establish their own insurance varieties, expand their insurance business and establish their own low-premium insurance systems supported by data.

According to a report by Ping An Securities, new energy vehicle insurance is an important part of the ecological chain of car companies, helping to give full play to the advantages of car companies in data and technology. New energy vehicles mainly adopt a direct sales model, and through sales in shopping malls or online sales, car companies have close contact with customers. At the same time, car companies expand automobile aftermarket businesses such as automobile maintenance and repair, settlement of claims, and automobile finance.

Compared with traditional insurance companies, new energy vehicle companies have higher costs and efficiency in obtaining data, which can achieve accurate pricing, give full play to cost advantages, and provide lower premiums. What’s more, using the data generated by automobiles to process insurance will greatly improve the claim processing speed and shorten the claim processing cycle. The dual advantages of price and experience help to attract more consumers.