NIO Acquires Insurance Brokerage Firm to Enhance Services
Chinese electric vehicle maker NIO, which set up a subsidiary insurance brokerage firm at the beginning of this year, has recently acquired another insurance company that was established eight years ago.
Huiding Insurance Brokerage Co., Ltd. is now 100% controlled by Anhui NIO Data Technology Co., Ltd., an enterprise mainly engaged in software and information technology services under NIO that was established this year, 80% owned by William Li, the founder and chairman of NIO. Huiding Insurance Brokerage was set up in May 2014 in China’s eastern Anhui Province with a registered capital of 50 million yuan ($7.16 million).
NIO has been developing operations in the insurance sector for some time now. In January of 2022, NIO Insurance Brokerage Co., Ltd. was formally established, with registered capital of 50 million yuan.
One insurance industry insider pointed out to domestic media outlet Lanjinger, “At present, new energy vehicle makers in China lack the resources accumulated through traditional automobile 4S stores. In order to enrich automobile services, manufacturers usually cooperate with insurance companies, and their right to speak and choose is weak. The investment in insurance brokerage companies is helpful to further grasp the initiative in cost coordination and product optimization, and realize the accumulation of data.”
After obtaining an insurance intermediary license, if an entity carries out business in various sectors, it still needs to report to regulatory authorities, which requires a certain amount of time. For auto insurance, which has regional restrictions, the establishment of landing service institutions is particularly important. Direct acquisition of companies with multiple branches can save efforts in organizational establishment and personnel team building.
Chinese EV makers are now investing heavily in insurance. As early as 2018, XPeng established an insurance agency in Guangzhou, and in March this year, BYD Insurance Brokerage Co was established. In June, Li Auto acquired Yinjian Insurance Brokerage through its subsidiary and won a national insurance intermediary license.
SEE ALSO: NIO Invests $7.9 Million to Set Up Insurance Brokerage Company
Companies that have insurance licenses are now creating brand attraction and a broad services ecology. On December 18, Li Auto introduced an online insurance service. When the insurance brokerage company was first set up, NIO said that it had not ruled out jointly launching exclusive insurance products alongside major insurance companies in the future.
