Source: Financial Services Association Author: Zou Juntao

In recent years, issues such as the cost of new energy vehicles have attracted many car owners to complain. However, the Finance Association reporter noticed that recently, a Xiaomi SU7 car owner posted a premium plan for a new car online. Many netizens have said that the premium plan is “not expensive” and is lower than expected.

Earlier, the regulatory disclosure stated that the NEV insurance pricing mechanism will be further optimized. Are the lower-than-expected Xiaomi car premiums reported by netizens affected by the new pricing mechanism? On April 3, the Financial Services Association reporter interviewed customer service and sales staff of a number of car insurance companies cooperating with Xiaomi. The response was that currently NEV insurance is still implemented according to the original pricing rules, and there have been no new changes yet. Regarding the optimization of the NEV insurance pricing mechanism mentioned by the regulation, a relevant person from an insurance company in South China said that no new progress has been received yet.

As for the Xiaomi car premium plan reported by some netizens, it is lower than expected, a car insurance salesperson said that it may be due to regional differences.

Xiaomi Auto's “low premiums” sparked buzz, and cooperative insurers responded that there was no change in relevant policies

Recently, Xiaomi cars welcomed the first batch of deliveries. The official Xiaomi Auto platform also cooperates with the four insurance companies Ping An Industrial Insurance, Yangguan Financial Insurance, People's Insurance, and Pacific Financial Insurance to provide users with suitable official insurance products.

On April 3, a car owner who purchased the Xiaomi SU7 Max Founder's Edition posted a pricing plan for new car insurance on Weibo. According to public information, the official Xiaomi platform currently provides two insurance plans for this model: basic version and premium version.

Among them, the premium for the basic version is 6,638.29 yuan, including Jiaotong Insurance (950 yuan), commercial insurance (5,500.29 yuan), and driving accident insurance (188 yuan). The premium for the Premium Edition is $7,035.95. The difference is mainly in the coverage for items such as third party liability insurance. The premium plan's third party liability insurance coverage was upgraded from 2 million yuan to 3 million yuan.

Regarding this premium quotation plan, many netizens said, “It's not expensive.” Some netizens claimed that their “180,000 car would cost more than 6,000”; others said that their 100,000 NEV brand actually had a premium of 5,500 for the second year. According to information, the price of the Xiaomi SU7 MAX version is 299,900 yuan.

Additionally, CFAC reporters have noticed similar views and discussions on other media platforms. In today's headlines, some car owners revealed that the premium for the basic version of the Xiaomi SU7 (priced at 215,900 yuan) is less than 6,000 yuan for full insurance (3 million with three liabilities). Many netizens have reported that the premiums for Xiaomi cars are lower than expected, and even lower than the premiums for new low-priced fuel trucks.

Regarding online discussions on Xiaomi car premiums, on the afternoon of April 3, a Finance Association reporter consulted with the four insurance companies cooperating with Xiaomi to see if there have been any new changes in the pricing policy of Xinneng Auto Insurance. The official customer service of several insurance companies responded that they have not heard that Xinneng Auto Insurance has a new policy; currently, it is still being implemented according to the original pricing mechanism.

People's Insurance Auto Insurance sales staff told the reporter that the online dispute over Xiaomi car premiums may be due to geographical reasons. According to information, on June 1, 2023, the “Second Comprehensive Reform” of domestic auto insurance reached the deadline for implementation. According to the “Notice Concerning Expanding the Scope of Commercial Vehicle Insurance Independent Pricing Coefficient Fluctuations” issued by the former China Banking Insurance Regulatory Commission, it was clarified that the floating range of commercial vehicle insurance autonomous pricing coefficients was expanded from 0.65-1.35 to 0.5-1.5, further expanding the pricing autonomy of property insurance companies, and implemented in various regions according to local conditions.

A CIFA reporter noticed that the upper insurance region for the Xiaomi SU7 Max Founder's Edition mentioned above is Beijing, and another blogger posted on Weibo that the price of the basic plan offered by the Xiaomi SU7 at the same price (price of 299,900 yuan) in the Anhui region was as low as 5797.24 yuan.

Policies to optimize the pricing mechanism for new energy vehicle insurance have yet to be implemented

The main reason why the Xiaomi car premium plan has sparked a buzz is that in the past, NEVs generally had higher premiums than fuel vehicles.

According to the “NEV Insurance Market Analysis Report” published by Bank of China Insurance, the average premium for new energy vehicles is about 21% higher than that of fuel vehicles. On the other hand, according to industry insiders, the overall payout rate in the NEV insurance industry is over 100%, and car insurance companies themselves are “shouting losses.”

At the end of last month, China Taibao held a briefing on the 2023 report. Zeng Yi, general manager of Taibao Insurance, predicted at the meeting that the growth trend of NEVs in China will become more and more obvious. “However, the risk rate of new energy vehicles is close to double that of fuel vehicles. In addition, demand for travel has increased since the epidemic this year, and the frequency of car use has increased dramatically. The comprehensive cost ratio of our NEV insurance also exceeds 100%, and there is some compensation pressure.”

New energy vehicle insurance has a high payout rate, leading to controversy due to the corresponding chaos of high premiums and denial of insurance. During this year's two meetings, Li Yunze, director of the State Financial Supervisory Service, said in response to questions from media reporters during the “Minister Channel” intensive interview that research is being carried out to reduce the down payment ratio for passenger car loans while further optimizing the pricing mechanism for new energy vehicle insurance.

On the afternoon of April 3, the People's Bank of China and the State Financial Supervision and Administration issued the “Notice on Adjusting Policies Related to Automobile Loans”. According to the notice, the maximum loan ratio for private use of traditional power vehicles and private new energy vehicles was adjusted from the original 80% and 85% to be determined independently by financial institutions.

The policy to reduce the down payment ratio for passenger car loans has been implemented, but when will the policies related to optimizing the NEV insurance pricing mechanism come? On the evening of the 3rd, the Financial Services Association reporter learned from a relevant person at an insurance company in South China that the relevant policies are still pending.

Currently, insurers need to pay attention to how to reduce the comprehensive cost rate of NEV insurance. In January of this year, Xu Yishan, chief financial analyst at Fangzheng Securities, pointed out that the comprehensive cost rate of NEV insurance in the industry currently exceeds 100% and is still in the exploration stage. It is expected that the comprehensive cost rate for NEV vehicle insurance will gradually be kept within 100% in the future as empirical data is accumulated and costs are further optimized.

edit/lambor