Tesla, the pioneering electric vehicle company, first launched its insurance business in 2019. This month, BYD Insurance, the property insurance subsidiary of Chinese automaker BYD, officially announced the expansion of its car insurance offerings in 7 major provinces in China. Before this expansion, BYD insurance had a very limited market reach which began in late 2021. Oddly, one of the places that remains closed for now is Shenzhen, where BYD Insurance is headquartered. In any case, this expansion marks a strategic move by BYD to diversify its business and leverage its expertise in the industry.
Through this service, BYD Insurance provides customers with comprehensive insurance solutions, including car insurance and personal insurance products, tailored to their specific needs. Customers can customize their insurance plans on the enrollment page.
BYD is not the only car maker in the insurance industry. In recent years, several new energy vehicle (NEV) manufacturers, such as Tesla, Xpeng, Nio, and Li Auto, have ventured into the car insurance market by setting up or acquiring insurance intermediary licenses. However, most automakers have participated in the insurance industry as intermediaries, meaning they can only act as agents and cannot independently adjust premium rates.
In contrast, BYD Insurance has received regulatory approval to use the nationwide standard compulsory insurance terms, basic insurance rates, and corresponding rate adjustment factors. This allows the company to have more flexibility in pricing and product offerings. Several online users have reported significant savings compared to other major insurance company quotations.
The move to strengthen BYD’s insurance business comes when the NEV insurance market faces challenges, with vehicle owners complaining about high premiums while insurance companies struggle to maintain profitability. BYD chairman Wang Chuanfu has acknowledged this issue, stating that “the company aims to lower various costs and expenses in its insurance operations to ensure that NEV insurance not only avoids losses but also becomes profitable.”
Analysts believe that as automakers have a deeper understanding of vehicle data, they can leverage their automotive expertise to gain a competitive edge in areas such as business acquisition, rate setting, claim assessment, and repair services in the NEV insurance market.
As BYD Insurance officially expands its insurance offerings in 7 provinces, the market will be closely watching its performance and its impact on the broader NEV insurance landscape in China.
Source: HeXun
