Recently, a number of new energy vehicle owners have reported that they have encountered a large premium or even been denied insurance when purchasing car insurance. Why are new energy vehicle premiums more expensive? For new energy vehicle insurance, what is the problem of "car owners shouting expensive, insurance companies shouting losses"? The reporter interviewed industry insiders.
How expensive is it to insure new energy vehicles?
The main reason why new energy vehicles are expensive to insure is that the entire auto insurance market will operate poorly in 2023. Gao Yun, chief actuary of Zheshang Insurance, said that in fact, according to the information exchanged among peers, the comprehensive cost ratio of new auto insurance policies in 2023 will basically exceed 100%. "This data includes both new energy vehicles and fuel vehicles, which means that the new car insurance business is no longer profitable, and the new energy vehicle insurance business is likely to be even worse. Gao Yun said.
The core factor that makes no money from new energy vehicle insurance is that the loss ratio is too high, and the high loss ratio is mainly due to the high insurance rate. "Judging from the policy data of Zheshang Insurance in 2023, the insurance rate of new energy vehicles is twice that of fuel vehicles. For example, the compulsory traffic insurance of fuel vehicles is about 10 points, and the new energy vehicles will be more than 20 points. Gao Yun said that without considering other factors, the premium of new energy vehicles will have to at least double on average to level the cost of fuel vehicles.
Why is the accident rate of new energy vehicles high? First of all, the start of new energy vehicles accelerates quickly, and for some owners who still retain the driving habits 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 relatively high proportion of new energy vehicle owners. Finally, due to the lower cost per kilometer of new energy vehicles, many new energy vehicle owners who have registered for the use of family cars will run online car-hailing, but they will not be insured according to the commercial vehicle, so the insurance company will charge a lot less premiums. Therefore, many insurance companies will additionally purchase third-party data to indirectly identify whether new energy vehicles are used for operation based on indicators such as mileage.
In addition to the high accident rate, the industry also generally believes that new energy vehicles have the characteristics of expensive maintenance costs, which is related to the intensive application of new technologies (such as intelligent cockpit and intelligent driving), the immature chain of accessories, and the opaque maintenance plan. However, the situation may have improved for now. Some industry insiders from the insurance department of car companies said that from the after-sales maintenance data, the proportion of battery maintenance amount is not high. Gao Yun told reporters: "Judging from our company's data, after the accident, the average compensation claimed by customers is not much different from that of fuel vehicles, but the excessively high accident rate leads to the high level of new energy vehicle insurance." ”
Because there are more risk factors to consider in the pricing process of new energy vehicle insurance than fuel vehicles, the insurance premium** of new energy vehicles is higher than that of fuel vehicles at the same price. "Even so, due to the upper limit of the pricing coefficient of car insurance, some car insurance** insurance companies still lose money even if they reach the 'limit**'. Liu Dan, head of the new energy vehicle and intelligent transportation industry at Munich Re's China Innovation R&D Center, said that from a business point of view, insurance companies have to refuse to insure part of their business.
The regulator has strict restrictions on the benchmark premium of new energy vehicles, and the extent that car insurance** can be increased is far from covering the increase in the insurance rate of new energy vehicles, which is basically a loss-making transaction. Therefore, most small and medium-sized insurance companies both love and hate this business, and it is painful to do it or not to do it. Gao Yun said.
Liu Dan believes that to solve this problem, it is necessary to strengthen cross-industry exchanges and cooperation. From the perspective of vehicle design, car companies need to strengthen the maintainability and ease of maintenance of vehicles, so as to reduce maintenance costs in accident maintenance and reduce the zero-integer 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 the level of road traffic safety. "Only by effectively reducing the overall accident rate and maintenance cost of new energy vehicles can we fundamentally solve the problem of premium insurance and car insurance refusal. Liu Dan said.
The industry is looking forward to liberalizing the innovation mechanism
Recently, the regulatory authorities have repeatedly issued documents on the high cost and high cost of new energy vehicle insurance, involving the rectification of industry rates and the requirement that insurance should not be refused "one size fits all". For example, in September 2023, the State Administration of Financial Supervision and Administration issued the Notice on Strengthening the Management of Auto Insurance Expenses, requiring comprehensive strengthening of internal management of auto insurance expenses, continuous improvement of the market-oriented formation mechanism of commercial auto insurance rates, and comprehensive strengthening of the "integration of reporting and banking" in the control of commercial auto insurance expenses. In January 2024, the State Administration of Financial Supervision and Administration issued the Notice on Effectively Underwriting New Energy Vehicle Insurance, requiring that compulsory traffic insurance shall not be denied insurance, and commercial insurance shall be fully insured; It is not allowed to adopt unreasonable restrictive underwriting measures such as "one-size-fits-all" for specific new energy vehicles in terms of system control and underwriting policies, and adjust the unreasonable assessment targets set for new energy vehicle insurance. Industry insiders believe that under the current situation, large insurance companies should reflect more responsibilities and responsibilities, temporarily sacrificing 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 shouting expensive, insurance companies shouting losses" needs to seek long-term solutions and methods.
At present, the product liability and coverage of all new energy vehicle insurance can be floated** 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 Association of China issued the Model Clauses for Commercial Insurance of New Energy Vehicles (Trial) of the Insurance Association of China. After that, all new energy vehicle insurance developed by insurance companies must be implemented within this model clause.
With the rapid development of new energy vehicles in China, the insurance products that have just begun to explore have gradually exposed new problems, and the rigid model clauses are gradually difficult to meet the diverse risk protection needs of consumers. A number of industry insiders expressed the hope that the regulatory authorities will carry out some targeted innovation and exploration in the field of new energy vehicle insurance, further improve 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 protection liability, insurance companies can be allowed to set their own insurance coverage; In terms of charging mode, UBI car insurance (insurance based on driving behavior-based pricing) can be developed, which is charged according to mileage. Insurance companies have made great efforts to innovate, force the development of the industry 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, so as to promote the high-quality development of the insurance industry. Gao Yun said.
New energy vehicles naturally have abundant driving behavior data, and a large amount of data is an important factor for insurance companies to achieve accurate pricing. Therefore, in theory, NEV insurance should have the inherent advantage of being data-rich, but the reality is that it is difficult for insurance companies to obtain data on the driving behavior of NEVs. Industry insiders expect to promote the commercialization of driving behavior data from the policy level, or make full use of data resources through other ways to solve the current problem of prominent contradictions in the pricing of new energy vehicles.
Chen Donghui, former president of Swiss Re China, believes that the only way to solve the dilemma of new energy vehicle insurance is to completely separate the car insurance for family self-use and online car-hailing, so that the premium corresponds to the risk, and according to different business supervision. If we ignore the differences between household and operation, and do not allow price increases according to the current product rates, not only will we not be able to solve the business dilemma of new energy vehicle insurance, but also significantly increase the premium burden of real family car owners, because they will also have to share the insufficient premiums of online car-hailing.
The current excessively high accident rate is due to the high proportion of online car-hailing. After the new energy vehicle owners have passed the period of inadaptability to driving electric vehicles, the accident rate of new energy vehicles for family use will decrease significantly. The high compensation per case is mainly due to the short age, high price and expensive accessories of new energy vehicles. It is worth noting that collision wearing parts account for a relatively high proportion of the claim cost, and its compensation cost exceeds that of the battery, which is also driven by the high proportion of online car-hailing accidents. With the gradual maturity of supporting specifications for spare parts and repairs, the average compensation for new energy vehicles for family use will also decrease. Chen Donghui said.
Ideally, it is necessary to charge according to the mileage and driving behavior, and completely distinguish between household and commercial vehicles, but it will cause online ride-hailing drivers to have too high premiums to afford. Chen Donghui believes that under the current situation, the complete liberalization of the independent pricing coefficient of new energy vehicles does not have the corresponding conditions. However, on the basis of moderately liberalizing the independent pricing coefficient of new energy vehicles, we can explore and encourage online car-hailing platform companies and online car-hailing owners to jointly bear the car insurance premium, so that the platform can provide the contracted online car-hailing with a part of the premium that exceeds the premium for family self-use, as a necessary condition for the operation of online car-hailing. This not only solves the problem of premium adequacy, but also ensures that the premium is not fully borne by the ride-hailing driver.
Cross-border car companies stimulate more potential
The good news is that new energy vehicle companies have taken a fancy to the huge development potential of new energy vehicle insurance and have begun to enter the insurance industry. In November 2023, BYD Property Insurance was approved by the State Administration of Financial Supervision and Administration to add "motor vehicle insurance" business, including compulsory motor vehicle traffic accident liability insurance and motor vehicle commercial insurance; BMW (China) Insurance Brokers*** has also been approved to operate insurance brokerage business.
In recent years, domestic car companies have crossed over to participate in the insurance business, and car companies such as Weilai, Ideal, Xiaopeng, Leap, and BYD have set up their own insurance brokers or ** companies. From an international point of view, Tesla, which was the first to promote UBI car insurance in the market, is still in the stage of hard exploration and running-in. It is reported that in the first nine months of 2023, Tesla Insurance lost $16 million; At the same time, Tesla owners' premiums have been reduced by about 30%.
In this regard, Chen Donghui believes that the regulatory authorities can give the leading car companies a "regulatory sandbox" to promote car companies and insurance companies to boldly explore the innovation and iteration of new energy vehicle insurance. For example, all-digital auto insurance, full-process door-to-door service instead of cash compensation, green car insurance that charges according to driving behavior, pure direct car insurance, and productization of value-added services. "Attempts in these aspects may make the innovation of new energy vehicle insurance at the forefront of the world, matching the status of China's new energy vehicles in the world; It is also possible to revolutionize the customer experience of auto insurance, thereby changing the negative impression consumers have of new energy vehicle insurance. Chen Donghui said.
When car companies enter the insurance market, they will not be able to establish a complete ability of insurance operation overnight. Liu Dan said that auto insurance operation is a complex system engineering, although car companies naturally have the advantages of vehicle design parameters, vehicle operation data, customer contact points, etc., but new energy auto insurance involves product design, pricing, sales, customer operation, claims, risk control and other professional fields. This requires car companies to have an objective understanding of the role of auto insurance in the life cycle of auto 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 vehicle insurance, and strengthen the supply of products such as UBI vehicle insurance, vehicle-electricity separation insurance, and autonomous driving insurance on the supply side. At present, all parties in the insurance industry are actively deploying in the field of new energy vehicle insurance, and Munich Re has also set up a special 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.