Vehicle networking challenges auto insurance ecosystem

"Car networking will subvert the entire auto insurance ecosystem." It was this belief that drove Zhao Qiang (alias) resolutely bid farewell to the actuarial director of the auto insurance department of a large insurance company to create a car networking company designed specifically for insurance companies based on car networking Auto insurance innovative products.

In his view, the car network is rapidly changing the pricing system of auto insurance products - in the past, auto insurance pricing mainly by actuarial consulting firm to help insurance companies based on insured amount, model estimates; but in the car networking era, auto insurance pricing will achieve "people-oriented" , That is, the owner's driving habits and driving mileage is the vehicle insurance pricing benchmark.

A car owner who has good driving habits may only pay 20% -30% of the existing auto insurance premiums; otherwise, it may pay 3-4 times the existing premiums.

Car networking on the huge impact on auto insurance pricing system, the insurance company will not turn a blind eye.

The reporter learned from many parties that many companies such as PICC Life, PICC Life Insurance, Ping An Property Insurance and Pacific Property Insurance are involved in developing car insurance products based on car networking in different ways.

A property and casualty insurance company executives pointed out that with the auto insurance market pricing reform further clarified, auto insurance companies to reduce rates while expanding liability claims, with car networking for auto insurance product innovation, is undoubtedly the insurer seeking differentiated competition new One of the means.

Take PICC as an example, it has completed a comprehensive solution for network-related insurance, including technology selection, analysis and modeling, business model and operation structure, and formed two sub-modules of business vehicles and family cars. In the future, PICC also plans to select 5 cities across the country to conduct tests for its customers and comprehensively observe, evaluate and verify the operability of car networking insurance in technical and commercial solutions, especially the acceptance of car owners.

Meanwhile, several internet companies, including Tencent, have started to provide insurance companies with data that can be used to assess the owner's driving style for differentiated auto insurance pricing with the insurance companies they work with.

The aforesaid PICC executives said with no worries that this cooperation model is making internet companies more and more powerful in terms of the provision of internet of things insurance and pricing of products and even participating in the R & D and design of automobile insurance products Paul process.

Big data decide success or failure

Currently, the main pricing basis for car network insurance comes from UBI and OBD.

The so-called UBI (Usage Based Insurance), that is, premium pricing mainly depends on the owner's actual driving time, mileage, location and specific driving style, known as "pay only when driving."

OBD (On-Board Diagnostic) is an on-board diagnostic system that enables insurance companies to assess the owner's driving style by transmitting various types of driving data. Usually driving style owners get a lower car insurance rates.

Europe and the United States car network insurance market, the United States Progressive Insurance (Progressive Insurance) has become a benchmark. The insurance company through the OBD technology vehicle network to collect a large number of drivers driving data to verify the driving behavior of the owners model validation for driving habits of the owners to give more premium discount.

The successful trial of insurance companies to succeed, to attract a number of domestic auto insurance companies have to follow suit.

The insurance company executives bluntly, from the car network technology layout considerations, insurance companies have to solve two problems, first, binding technology, OBD, UBI equipment and the rigid relationship between the insurance vehicles to prevent the owners looking for other vehicles to replace, resulting in Fraud and other moral risks occur; Second, communication technology, insurance companies must always master the driving data for the timely adjustment of pricing reference rate.

The success of the United States forward has its own unique insurance, the insurance company has hundreds of thousands of US car owners driving data and mileage. However, a big shortboard for the domestic insurance company to test the water truck networking insurance is precisely the lack of adequate and comprehensive data on the owners' driving.

This also makes Internet companies "organic". In addition to Teng Xun introduced car networking products Teng Shing Road Po, China third-party auto insurance website car insurance worry-free recently also introduced based on car networking and big data smart car safety box - car treasure.

Zhao Qiang bluntly, a major source of revenue for these car networking products, initially to the insurance company to send a large number of driving data for insurance companies to develop differentiated pricing car insurance network insurance products, charge a certain amount of service charges; but when the Internet companies to accumulate When enough driver's driving data is available, they have the ability to independently develop and design personalized auto insurance products. They can register their products through channels of insurance companies and then sell them through the Internet platform, thus making them more profitable.

But whether the data is fully and effectively become the key to the success or failure of car networking insurance products. As the application of the auto insurance network technology is not long, the actual number of owners of UBI or OBD equipment is not large enough, which may lead to the deviation of the corresponding driving data of the owner during the collection and analysis, thus affecting the auto insurance company's pricing accuracy of the car networking insurance , The ultimate insurance company itself has to pay for "low premiums, high claims."

In the view of Zhao Qiang, the prerequisite for the rise of car networking insurance should be that car manufacturers install car networking UBI or OBD equipment when the car is shipped to help insurance companies maximize the driving record data collected by all car owners and establish more comprehensive and accurate car owners Driving style assessment model, the insurance product pricing tends to be more accurate and reasonable.

"But in the era of car networking, waiting for an opportunity means losing opportunities." Zhao Qiang said frankly that he is trying to use a new car networking business model to subvert the original auto insurance pricing system while further deconstructing the existing business structure of auto insurance companies, Strive for more space for their own development.

Auto insurance business structure "deconstruction"?

Zhao Qiang is trying, and the existing car networking insurance R & D pricing model exactly the opposite.

Most car networking insurance research and development model is to collect data and then develop product terms and differentiated pricing, but I want to do is through actuarial model to determine the insurance company operating car network insurance profit margin, combined with the owner's driving style evaluation data and products Service needs, design personalized online car insurance products online sales. "He said.

Implementation of the specific product model, that is, each owner will install a similar taxi meter network equipment, the meter shows the amount is the car owners need to pay auto insurance premiums, and the premium calculation, it is a combination Driver's driving range, driving style, driving a variety of actions and other factors, calculated from the big data analysis model.

He did not disclose the big data analysis model will track the driving behavior of the owner, but he bluntly, the benefits of this business model is to ensure that insurance companies in the rate of return on car networking insurance to avoid bias due to data and analysis The wrong product pricing, resulting in operating losses.

This also means that the insurance company's product pricing and underwriting work have been completed by "meter" autonomy, the future auto insurance business structure can be more streamlined, or even peel off the auto insurance pricing actuarial and underwriting, just keep the claims, Customer service, product design and other related departments. But this may have encountered resistance in the company's existing framework.

"Some European and American insurance companies have considered a similar auto insurance business model, but local law does not allow them to do so." Zhao Qiang, for example. For example, insurance companies can collect the length and frequency of calls made by each owner through OBD equipment, which is an important reference for independently pricing car networking insurance through some data models. However, this practice has violated some personal privacy protection laws.

Although China has not yet imposed strict restrictions on the collection of such information, certain ways in which the Internet of Vehicles may acquire big data must also face some of the possible boycott feelings from consumers.

For insurers, they face the tough choice of a car-connected insurance business model, whether to build a car network operation platform with an external agency, or to host the platform to an external agency or simply build their own platform.

A car insurance company director of auto insurance frankly, no matter what kind of model, insurance companies must first clarify the auto insurance company is about to face a business paradox that the car sales department is eager to further reduce insurance policy pricing, For them to gain greater market share and business income, while the risk control claims that the cost of car insurance network insurance should not be too low, at least need to cover the risk of fraud and other moral hazard arising from the additional cost of claims.

"In fact, this is similar to the operating difficulties facing the auto insurance market reform. On the one hand, the auto insurance premium rate is further reduced. On the other hand, insurance companies need to expand their liability claims and conflicts of interest among the divisions will become more apparent." He Say.

Zhao Qiang Earnings Forecast for Car Insurance Business Model - Under the premise of a certain sales volume of car insurance, insurance companies can increase the underwriting profit margin by about 15% by simplifying or stripping business processes such as pricing and underwriting.

Currently, he said he is working with a large insurance company to develop this car networking insurance business model. However, this set of business model can be implemented, still need to obtain regulatory permission. Especially when IOT is transforming the standardized auto insurance products into personalized products, whether these products can pass the record approval usually depends on the opinions of the regulatory authorities.

After all, car networking insurance is no longer a simple technology application, but a change in the business model that may require regulators to do a "top-level design" first and establish new ones in terms of business model determination, technology selection, and standards development Regulatory guidelines to promote the car network insurance and insurance company business innovation to form a positive interaction, promote auto insurance market-oriented reform process.

"In fact, the CIRC is encouraging the innovation of internet-based insurance products." The aforementioned auto insurance supervisor said in the 21st Century Business Herald.