On September 9th, China Net Finance reported that in July of this year, new energy vehicles surpassed gasoline vehicles for the first time with a monthly retail penetration rate of 51.1%. With the rapid growth of the new energy vehicle market, the demand for new energy vehicle insurance has also increased rapidly, and new energy vehicle insurance has even become the second growth curve of the entire vehicle insurance industry.
Recently, Zhang Lei, CEO of Cheche Technology, stated in an interview that the new energy vehicle insurance market is still in the blue ocean stage. With the development of the market, new energy vehicle insurance will definitely return to the controllable range of comprehensive costs. It is expected that in three years, new energy vehicle insurance will usher in a profitable era.
Zhang Lei also stated that car companies will become one of the main "entry points" for car insurance, and it is expected that car companies will contribute at least 20-30% of the market share. Car companies will gradually replace 4S stores as the main insurance sales channel. The market share of 4S stores is expected to decrease from 40% to below 20%.
Expected profit from new energy vehicle insurance in three years
According to data from the China Association of Automobile Manufacturers, in the first half of this year, the production and sales of new energy vehicles reached 4.929 million and 4.944 million respectively, with year-on-year growth rates of 30.1% and 32%, and a market share of 35.2%. In July, new energy vehicles surpassed gasoline vehicles for the first time with a monthly retail penetration rate of 51.1%.
For the insurance industry, the rapid development of new energy vehicles undoubtedly brings new development opportunities to the car insurance market, and new energy car insurance has even become the second growth curve of the entire car insurance industry.
It is expected that within the next three years, the proportion of new energy vehicle insurance in the entire vehicle insurance market will reach 25% -30%. In other words, new energy vehicle insurance will contribute at least 200-300 billion yuan to the market size. "Recently, Zhang Lei, CEO of Cheche Technology, said in an interview with China Net Finance reporters and others.
Zhang Lei stated that the current new energy vehicle insurance market is still in the blue ocean stage, and some small and medium-sized insurance companies may suffer severe losses, while large insurance companies are in a state of slight losses. With the development of the market, in the long run, new energy vehicle insurance will definitely return to a comprehensive cost controllable range. It is expected that in three years, new energy vehicle insurance will usher in a profitable era. That is to say, the underwriting loss problem of new energy vehicle insurance will be improved, and the comprehensive cost ratio will tend to around 100%. This is due to a combination of factors such as marginal effects, an increase in existing markets, and an improvement in the pricing power of insurance companies.
This judgment is based on two aspects: firstly, from the perspective of car companies, with the improvement of socialized repair capabilities, the maturity of repair technology, and the improvement of parts supply chains, compensation costs are gradually decreasing. Secondly, as the number of new energy vehicles increases, there is a marginal effect on maintenance costs due to the universal use of parts for different vehicle models. By accumulating more data and utilizing it to achieve digital closed-loop, insurance companies will be able to price more accurately and better reflect the differentiation level of vehicles. Over time, insurance companies will gradually turn losses into profits.
Assist small and medium-sized insurance companies in "regaining" the market
The high occurrence rate and high payout ratio are the two major reasons for the current dilemma of new energy vehicle insurance, which has become a consensus in the industry. The reason for the high cost of new energy vehicle insurance lies in the high frequency of accidents and the high average compensation for each case.
According to data, in terms of accident frequency, the accident frequency of new energy vehicles is higher than that of traditional fuel vehicles. Among them, the household car with the highest proportion of new energy vehicles has an accident rate of 30%, significantly higher than the accident rate of fuel vehicles at 19%; From the perspective of average compensation for car damage cases, the average compensation for new energy vehicle cases is generally higher than that for traditional fuel vehicles, reaching 7201 yuan for household cars and 600 yuan higher than that for fuel vehicles.
As a technology company specializing in automotive insurance, CheCheTech was founded in 2014 and continues to promote technological innovation and system research and development. According to Zhang Lei, the development strategy of Cheche Technology mainly focuses on the deep integration of "insurance technology+scenarios". Through the application of five digital scenarios, it helps the insurance industry to achieve high-quality development and transform towards digitization and intelligence.
Firstly, digitalization of insurance for car companies and application programs for car companies. CheChe Technology has independently developed a new energy insurance SaaS system, which enables the core transaction system of car insurance to be directly linked to car companies and insurance companies, breaking down barriers such as transaction systems, data, and compliance. Provide full process new energy insurance service solutions such as new car insurance, one click renewal, and intelligent claims for car companies, reshaping the insurance channel and claims end; Secondly, digitalization of insurance for car companies+big data for car companies+industry big data. Utilizing big data and AI pricing capabilities, providing intelligent decision-making models, improving the risk control system of car insurance, and offering personalized car insurance pricing. Again, digitalization of insurance and intelligent driving for car companies. With the popularization of intelligent driving technology, customized insurance products based on intelligent driving are being explored, such as new insurance products launched on time, mileage, and vehicle usage scenarios. Then, insurance technology+intermediary informatization, and car technology empower the digital transformation of the insurance intermediary industry, helping insurance intermediaries achieve customer management, policy management, and financial management. Finally, insurance technology+digital platform. Connect more insurance transaction scenarios through digital platforms to promote the digitization and intelligence of insurance transactions.
Car companies' awakening 'to enter the disruptive landscape
For ordinary consumers, new energy vehicle insurance has become the largest expense in their vehicle costs. According to data, the expenditure on new energy vehicle insurance accounts for about 60-70% of the total expenditure.
A premium of 10 billion yuan can bring about 30% of the revenue to the after-sales department of car companies, which is approximately 3 billion yuan. This revenue mainly comes from after-sales parts and maintenance services. Therefore, in the case of limited profits in new car sales, the profits obtained through after-sales services are particularly important for car companies. "Zhang Lei said that this is also the main reason why more and more car companies choose to establish or acquire insurance intermediary companies and directly participate in insurance business.
Zhang Lei stated that car companies hope to guide accident vehicles to their own sheet metal spraying and repair networks by taking the initiative in insurance and claims. This can not only help car companies increase after-sales revenue, but also enhance control over insurance and claims processes, and improve consumer experience.
In the future, car companies will become one of the main 'entry points' for car insurance, and it is expected that car companies will contribute at least 20-30% of the market share. Zhang Lei said that the current size of China's car insurance market is about 800 billion yuan, and in the past, car companies' contribution to it was almost zero. Car companies will gradually replace 4S stores as the main insurance sales channel. The market share of 4S stores is expected to decrease from 40% to below 20%.
Zhang Lei stated that for new energy vehicle companies, carrying out car insurance business also faces various challenges. Firstly, the digital system construction cost of car insurance business is high, the cycle is long, and the integration with insurance company systems is complex, requiring a lot of time and effort; Secondly, car insurance business has localized characteristics and requires years of experience in connecting with insurance company branches. The main competition for car companies currently comes from sales pressure at the front-end, making it difficult to invest a large amount of resources in car insurance business layout.
Based on this, CheChe Technology has proposed a solution for the new energy vehicle insurance industry. Firstly, digitalization of insurance claims. The company has taken the lead in connecting the core systems of more than 10 car companies and 50 insurance companies, achieving a fully digital process from insurance to claims, providing car owners with one-stop online insurance and claims services, improving the output value of car companies' push repair and after-sales services, reducing insurance company sales costs, and anti fraud claims; Secondly, connect car company data to assist insurance companies in accurate pricing. By obtaining driving data and behavior data from car companies, insurance companies can have diversified pricing models, allowing car owners of different risk levels to enjoy reasonable premiums while ensuring coverage of high-risk vehicle models or operating vehicles. Thirdly, the new MGA model for car insurance empowers small and medium-sized insurance companies to achieve intelligent underwriting and claims processing. Faced with the problems of high premiums and difficult insurance coverage in the new energy vehicle insurance market, CheChe Technology has improved the underwriting and claims verification capabilities of small and medium-sized insurance companies through data and intelligent pricing models, helping them participate in the new energy vehicle insurance market.
Regarding the future development trend of new energy vehicle insurance, Zhang Lei proposed three keywords: Insider, Data+AI, and Long term Value.
The first keyword is Insider (embedded car insurance). In the future, car insurance may no longer be just a standalone financial product, but deeply embedded into the overall service package of car companies, becoming a part of the car owner experience.
The second keyword: Data+AI driven pricing. By combining car machine data with AI technology, future car insurance pricing will achieve personalized pricing for thousands of people. By analyzing the driving behavior data of car owners, such as the CFT Score, insurance companies can provide more accurate premium pricing, avoiding misjudgments caused by data silos in traditional models.
The third keyword is long-term value. For car companies, car insurance is not only an important source of revenue for after-sales service, but also an important means of maintaining long-term relationships with car owners. With the transformation of car companies to directly provide services to C-end users, car insurance has become an important component of the value management of car owners' entire life cycle. Car companies no longer rely solely on dealers, but establish long-term user relationships by directly targeting end consumers. By providing long-term insurance services, car companies can continue to participate in the subsequent driving experience after car owners purchase their vehicles, further enhancing user stickiness and brand value.