Cheche CEO Lei Zhang Highlights the Strategic High Ground of Car Insurance for Auto Makers at China EV100

Rhea-AI Summary

Cheche Group Inc. announced that Lei Zhang, Co-CEO, spoke at the China EV100 Forum on the NEV insurance market. He highlighted the growth potential, challenges, and innovations in the industry, emphasizing the importance of collaboration for sustainable development.

Automotive Industry Analyst

The integration of auto insurance directly with car manufacturers, as highlighted by Cheche Group's co-CEO, represents a significant shift in the automotive industry's value chain. This move positions car makers not only as vehicle producers but also as financial service providers, potentially capturing a larger share of the customer's lifetime value. The strategic acquisition of insurance companies by manufacturers like BYD and the establishment of insurance brokerage firms by others, indicates a trend towards vertical integration.

This trend has the potential to disrupt the traditional auto insurance market, as manufacturers could leverage their direct customer relationships and proprietary data from connected vehicles to offer more personalized insurance products. This could lead to increased competition for established insurance companies, which may need to adapt by investing more in technology and partnerships with tech firms to retain market share.

Furthermore, the mention of a 35% capture of accessories and spare parts sales income through direct insurance sales suggests a significant revenue opportunity for automakers. This model could also streamline the claims process, leading to higher customer satisfaction and loyalty. However, it's important to monitor how this shift impacts independent insurance brokers and the overall competitive landscape of the auto insurance industry.

Technology Analyst

The advancement of intelligently connected cars, as discussed in the forum, is rapidly transforming the auto insurance landscape. The integration of services like charging, maintenance and 5G connectivity into insurance offerings reflects the increasing convergence of automotive and technology sectors. This trend is not just adding value for consumers but also creating new revenue streams for both auto makers and tech companies.

As vehicles become more autonomous, the question of liability in accidents becomes more complex. The insurance industry's investment in research and innovation, as mentioned, is important to developing frameworks that can adapt to these changes. The role of data in assessing accident liability will grow and the companies that can effectively harness this data will likely emerge as leaders in the new insurance paradigm.

Moreover, the seamless initiation of repair claims through integrated insurance services could enhance operational efficiency for auto makers and insurers alike. The use of SaaS functions to provide real-time data on accidents could also expedite the claims process, reducing costs and improving customer experiences.

Market Research Analyst

The projected growth of NEVs in China to 36.9 million units by 2025, with corresponding insurance premiums reaching RMB186.5 billion, underscores the market's potential. As NEV adoption accelerates, the demand for specialized insurance products tailored to these vehicles' unique needs is expected to rise. This presents an opportunity for companies like Cheche Group to capitalize on a niche yet rapidly expanding market segment.

However, the shift towards manufacturer-sold insurance could also pose challenges, such as regulatory hurdles and the need for significant investment in digital infrastructure. It will be important to monitor consumer acceptance of purchasing insurance directly from auto makers, as well as the response from traditional insurance providers.

The collaboration between auto makers, insurance companies and technology firms, as advocated by Mr. Zhang, could be instrumental in overcoming these challenges. By pooling resources and expertise, these entities can drive innovation, enhance customer offerings and ensure the NEV market's sustainable growth.

BEIJING, March 27, 2024 /PRNewswire/ -- Cheche Group Inc. (NASDAQ: CCG) ("Cheche" or the "Company"), China's leading auto insurance technology platform, today announced that Lei Zhang, Founder and co-CEO of Cheche Group, delivered a speech at the recent China EV100 Forum encapsulating the state of the industry and sharing his expectations for the future. China EV100 is a non-profit policy and academic research institution, focused on the field of electric vehicles across disciplines, industries, sectors, and ownership. It is regarded as China's primary third-party think tank in the field of electric vehicles.

The 2024 China EV100 Forum was held from March 15^th to the 17^th in Beijing, focused on consolidating and expanding the advantages of new energy vehicle ("NEV") development. The Forum attracted industry leaders, experts, and scholars, such as Wang Chuanfu, Chairman of BYD; Wang Jun, President of Changan Automobile; An Conghui, President of Geely Holding Group and CEO of ZEEKR Intelligent Technology Holding Limited; Li Bin, Founder, Chairman and CEO of NIO; He Xiaopeng, Chairman and CEO of Xpeng Motors; Yu Chengdong, Managing Director of Huawei; CEO of Consumer BG and Chairman of Smart Car Solutions Business Unit; Yu Kai, Founder and CEO of Horizon; Zhou Daoxu, Director of the Financial Security Research Center; Wan Gang, Chairman of the China Association for Science and Technology, and others convened to discuss the development trends and challenges of the NEV industry. Remarks frequently underscored the complex and at times conflicting relationships among car makers that challenge them to simultaneously compete and collaborate.

During his keynote speech, Mr. Zhang addressed the current status and development trends of the NEV insurance market, noting that, according to Soochow Securities, the number of NEVs in China is estimated to reach 36.9 million by 2025, with insurance premiums reaching RMB186.5 billion. He went on to say, "The rapid development of NEVs has made auto insurance one of the largest expenses for consumers after the cost of the vehicle. The annual expense is much higher than the costs of charging and maintenance, and as a result, auto makers are increasingly focused on alternatives to strategically deploy insurance. Many auto makers, such as NIO and BMW, have established insurance brokerage companies, with BYD actually acquiring an insurance company. The established insurance companies, in turn, attach great importance to the NEV business and have ramped up investment in science and technology. Top leaders such as PICC, Ping An, China Pacific (CPIC), among others, have set up an independent science and technology entity to conduct special research on insurance for NEVs."

Mr. Zhang went on to illustrate how intelligently connected cars have transformed insurance into an integrated comprehensive service that provides charging, maintenance, 5G network, video and audio-visual subscriptions. Gone are the days of it being a simple financial product. The popularity of autonomous driving has also ushered in new challenges in the division of accident liability. These changes have prompted insurance companies, auto makers, and technology companies to invest significant resources into research and innovation.

He expects auto insurance directly sold by auto makers to drive change in three major ways. Through direct selling of auto insurance, auto makers will be able capture 35% of the accessories/spare parts sales income from aftermarket services, versus 20% with the old model. Direct auto insurance will not only bring front-end commission income to auto makers with insurance licenses, but it will help to increase the rate of back end working hours and spare part costs. And third, repair claims will be seamlessly initiated at the time of impact, ensuring the accident vehicles are fixed within the auto maker's authorized network.

Cheche's self-developed cornerstone system, its core auto insurance transaction platform, has direct links to both auto makers and insurance companies, expanding the digital insurance capabilities of manufacturers. Car owners can apply for insurance independently through the auto maker's app or through the vehicle's display, which greatly reduces the need for intermediate entities and improves the convenience and efficiency of insurance.

Through digital services, Cheche provides auto makers comprehensive and personalized insurance solutions, including new car insurance, one-click renewal, smart claims, and other services. Cheche works with insurance companies to simplify the process off initiating a claim. Car owners need only to click on the mobile app or vehicle display to complete the claim application, improving settlement efficiency. Embedded SaaS functions enable features such as one-click insurance to transmit audio and video data of the accident scene in real time so that the car owner is swiftly apprised of the assessed cost.

He concluded that collaboration from all parties is necessary to strengthen the industry, foster innovation, and pave a successful path forward to ensure the continued appeal and sustainable development of NEVs.

China EV100 will continue to hold a series of industry conferences and conduct research focused on automotive industry policy, cutting-edge technology, supply chain issues, and cross-border integration throughout the year. These results will provide valuable insight and help to guide the continued development of China's NEV industry.

About Cheche Group Inc.

Established in 2014 and headquartered in Beijing, China, Cheche is a leading auto insurance technology platform with a nationwide network of around 110 branches licensed to distribute insurance policies across 25 provinces, autonomous regions, and municipalities in China. Capitalizing on its leading position in auto insurance transaction services, Cheche has evolved into a comprehensive, data-driven technology platform that offers a full suite of services and products for digital insurance transactions and insurance SaaS solutions in China. Learn more at https://www.chechegroup.com/en.

Cheche Group Inc.:

IR@chechegroup.com

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SOURCE Cheche Group Inc.

FAQ

What was the main focus of Lei Zhang's speech at the China EV100 Forum?

Lei Zhang discussed the current status and development trends of the NEV insurance market.

What are the estimated number of NEVs in China by 2025 according to Soochow Securities?

Soochow Securities estimates the number of NEVs in China to reach 36.9 million by 2025.

How has the rapid development of NEVs impacted auto insurance in China?

The rapid development of NEVs has made auto insurance one of the largest expenses for consumers after the cost of the vehicle.

What are some of the changes brought about by the popularity of autonomous driving in the insurance industry?

The popularity of autonomous driving has ushered in new challenges in the division of accident liability.

How does Cheche's self-developed cornerstone system benefit auto makers and insurance companies?

Cheche's system has direct links to both auto makers and insurance companies, expanding digital insurance capabilities and improving efficiency.