On March 28, 2024, Xiaomi launched its first automotive, the SU7, marking a major entry into the brand new power car market. The insurance coverage premiums for this mannequin have drawn consideration attributable to their excessive prices, corresponding to these of conventional gasoline automobiles over 500,000 yuan. Main insurers like PICC Property and Casualty and Ping An Property Insurance coverage are providing protection that features particular clauses for brand new power automobiles similar to safety for the battery, motor, and digital management methods [para. 1].
The insurance coverage business has confronted challenges with new power automobiles earlier than. Excessive restore prices led some insurers to refuse protection for manufacturers like Tesla in early 2021. Regardless of the introduction of unique new power car insurance coverage later that yr, points persevered. New power automobiles are inclined to have greater accident charges and declare frequencies in comparison with conventional automobiles, typically leading to losses for insurers as they battle with pricing precisely attributable to inadequate information on these automobiles [para. 2][para. 3].
In response to those ongoing challenges, the Nationwide Monetary Regulatory Administration issued a draft discover aiming to enhance the standard of latest power car insurance coverage by increasing pricing autonomy amongst different measures. This proposal suggests rising the autonomous pricing coefficient vary from 0.65-1.35 to 0.5-1.5, permitting insurers extra flexibility in setting premiums primarily based on danger evaluation [para. 4].
The gross sales of latest power automobiles have surged dramatically in China, reaching a market share of over 31% in 2023 with gross sales nearing 9.495 million items. This fast progress has additionally seen a corresponding rise in insurance coverage premiums for these automobiles which now signify a good portion of whole auto insurance coverage income regardless of making up a smaller proportion of whole car numbers [para. 5].
Insurance coverage prices for brand new power automobiles are notably greater than these for conventional fuel-powered automobiles attributable to components like greater dangers related to battery packs and energy methods that are pricey elements of those automobiles. The business’s mixed price ratio stays above 100%, indicating constant operational losses inside this sector [para. 6].
The draft from NFRA not solely goals at adjusting premium charges but in addition proposes enhancing product choices and establishing security nets particularly tailor-made for high-risk operational automobiles like ride-sharing companies or industrial use vehicles which face even higher challenges acquiring protection [para. 7].
Total, whereas there may be an expectation that common premiums would possibly barely improve after implementing these modifications, it may result in extra balanced pricing reflecting precise dangers higher and probably easing points associated to acquiring insurance coverage protection for high-risk fashions [para. 8].
AI generated, for reference solely
