The auto insurance market in China by daxue

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dx@daxueconsulting.com +86 (21) 5386 0380
August. 2019
HONG KONG | BEIJING | SHANGHAI
www.daxueconsulting.com
1
THE AUTO INSURANCE
MARKET IN CHINA

© 2019 DAXUE CONSULTING
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2
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CONTENTS
Key Takeaways
Drivers of auto insurance demand
Key characteristics of Chinese consumers
New business models in car insurance market
How insurance companies adapt to consumers
Market Trends
8
08
09
23
31
36
44

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Key Takeaways
The market demand for vehicle insurance is still very large.
Large domestic brands are leading the auto insurance market.
Insurance companies are no longer wholly reliant on offline
distributors.
After-sales service has become an increasingly significant
competitive differentiator.
Usage based insurance is gradually applied in the field as a new business
model.
9

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Drivers of auto
insurance demand
10
1

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The history of car insurance in China
11
• People’s Insurance Company of China (PICC) first provided car insurance in 1950, ending the foreign monopoly in the industry.
• There are two categories of car insurance which came into force in 2016: 1) Compulsory liability insurance for traffic
accidents, to which statutory indemnity limits apply; 2) Commercial auto insurance for liabilities above the statutory
indemnity limits.
1950
Auto insurance was first
introduced in China, but it wasn’t
accepted by most consumers
due to the lack of publicity.
1980
China’s auto insurance was promoted
gradually since the rapid growth of public
transportation and private cars.
2019
New regulation welcomes the foreign players
into China with more than 50% ownership, it
may increase the competitiveness
1988
Auto insurance started to
dominate the non-life
insurance market in China
Regulation on Compulsory Insurance
of Liability for vehicles began to be
implemented
2006

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Compulsory liability insurance for traffic accidents (交强险)
Compulsory liability insurance for traffic accidents is used for covering third-party injuries and/or deaths in car accidents. It is
required by the Chinese government, whether consumers will use the vehicle for private or commercial purposes.
12
Source: www.clydeco.com
Provides the minimum liability coverage required by law.
It covers property damage, disablement, death, and/or the medical expenses of a person
that was injured during a road mishap involving vehicles.
No automobiles can be operated on the road without it.
The same limits are applied for all vehicles types, both personal and commercial.
Premium is regulated and stipulated by a simple rating table, and is differed by vehicle
types and few other variables with no territory differentiations at all.
Effective May 1st 2012, foreign-invested insurance companies are permitted to write
compulsory liability insurance for vehicle traffic accident in China, subject to the prior
approval of China Insurance Regulatory Commission.

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Commercial motor insurance (商业险)
 Commercial insurance offers wider financial protection against theft or damage to the vehicle sustained from events other
than traffic collisions, such as keying, weather or natural disasters, and damage sustained by colliding with stationary
objects.
 In China, there are two segments of commercial motor insurance: basic risks and additional risks. Car owners shall first
buy insurance for basic risks, then have access to additional insurance.
13
Basic risks
• Vehicle damage insurance covers all the damage to the car regardless of the reason.
• Third-party liability insurance covers compensation for the losses of the third party in accidents
• Theft insurance covers the vehicle and everything in it in the event of burglary or theft.
• The quota-free insurance. With a quota-free insurance policy, insurance companies will pay 100
percent of the compensation, no matter who is held responsible for the accident.
• Passengers insurance covers all passengers and is purchased according to the number of car seats.
Additional risks
• Free compensation special insurance. The insurance company shall be responsible for
compensation in the liability limit according to the deductible amount, based on the rate specified in the
corresponding basic insurance clause.
• Risk of spontaneous combustion, refers to the compensation for the loss of the combustion vehicle
caused by the failure of the vehicle's electrical, wiring, fuel supply system and the cause of the cargo
itself.
• Vehicle window and scratch insurance

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Gap insurance (差额保险)
 Gap insurance, often flogged by pushy car salesmen, covers the difference between the amount you paid for your car and the
amount an insurance company would give you if it was totaled or stolen.
 In China, gap insurance is not the main type of car insurance, however, many auto brands work with finance institutions to
provide gap insurance.
14
Source: http://www.gsafc.com.cn/product/cebqfw/index.shtml
https://www.moneysavingexpert.com/car-insurance/gap-insurance/
Consumers
Car insurance without
gap insurance
Car insurance including
gap insurance
When vehicles are totaled or
stolen, consumers will receive
a payment from insurance.
But the payment likely to be
less than what they paid
when they bought the vehicle,
insurance companies only
pay off the value of the
vehicle at the time of the
accident, which is much
depreciated from the original
values.
When vehicles are totaled or
stolen, consumers will receive
a payment from the insurance
company that is equal to the
amount the customer paid for
the vehicle. The “gap”
between the amount insurer
pays and the amount
consumers originally paid will
be covered.

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Collateral protection insurance (CPI)
 In China, when people buy vehicles through bank loans, banks will ask consumers to use their cars as collateral and buy
collateral protection insurance (CPI). If consumers can’t pay their debts and their cars are not enough to pay the principal and
interest of the loans, then the insurance companies will cover the rest of payment.
15
Source: http://www.cnautonews.com/jxs/j_jj/201609/t20160914_492687.htm
https://baike.baidu.com/item/%E8%BD%A6%E8%B4%B7%E9%99%A9/1788522?fr=aladdin
https://www.4autoinsurancequote.com/learning-center/what-is-collateral-protection- insurance/
Collateral protection insurance for vehicles can quickly transfer part of risks from banks to the
Chinese insurance companies. Thus, banks often relax the credit status evaluation of
consumers.
The main features of collateral
protection insurance in China
The Chinese insurance companies usually decide the CPI rate (insurance rate) according to
consumers’ credit status, they will evaluate credit status again and the process is very strict
since they have to take more risks.
Credit Status: It is a measure of lender’s willingness to lend the money to a particular person
depending on their ability to repay, from 0 to 100 points.
Insurance rate: it is the cost of insurance per exposure that insurance holders pay to acquire a
certain amount of coverage.

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Consumption and market size in China
Source: http://baogao.chinabaogao.com/baoxian/405061405061.html
16
400.5
430.0
551.6
619.9
683.5
758.6
834.5
0.0
100.0
200.0
300.0
400.0
500.0
600.0
700.0
800.0
900.0
2012 2013 2014 2015 2016 2017 2018
Auto insurance revenue in China
(Billion RMB, 2012-2018)
 By 2018, the auto insurance revenue has reached 834.5 billion RMB, with 10% year-on-year growth.
 Auto insurance dominates the non-life insurance market in China with over 70 percent of the total premium.

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Car drivers in China (1/2)
17
Source: National Bureau of Statistics of China & www.chyxx.com
> 20,000,000
20,000,000-10,000,000
10,000,000-5,000,000
5,000,000-1,000,000
< 1,000,000
Guangdong Province
29.53 million drivers
It has the largest proportion of
Chinese drivers
Geographical distribution of car drivers in China
(2017)
Xizang Province
0.42 million drivers.
It has the smallest proportion of
drivers
 More developed regions have more drivers
 More car drivers is more market potential for auto insurance
Eastern China.
35.06% of drivers in China
Northern China
50.86 million car drivers
Mid-South Region
Southwest China
12.70%.of drivers in
China
Northwest China
Northeast China

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Car drivers in China (2/2)
18
Source: Ministry of Public Security
302
327
360
385
409
2014 2015 2016 2017 2018
Number of vehicle drivers in China
(million–2014-2018)
290 million drivers were
men, reduced 2.9% from
2017.
57.68 million drivers were
older than 50 years old.
About 30 million drivers
had less than 1 year
experience
119 million drivers were
women, increased 18.65 %
from 2017.
 The increasing number of drivers means more car owners. Older drivers and inexperienced drivers bring adverse effects on
road safety. Therefore, car insurance is necessary for those drivers.
In 2018

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Road safety in China
 Although the total number of traffic accidents involving casualties slightly decreased in 2017, there were 63,772 deaths and
139,277 physical injuries reported.
 Auto insurance is becoming more and more important to cut the losses of car owners.
19
Source: ZhiYan.org
http://free.chinabaogao.com/jiaotong/201903/032640Q002019.html
198,394
196,812
187,781
212,846
203,049
175000
180000
185000
190000
195000
200000
205000
210000
215000
2013 2014 2015 2016 2017
Number of traffic accidents involving casualties in China
(2013-2017)
Main causes
of traffic
accidents in
China
Speed
Driving in
reverse
Drunk
driving
Violating
traffic
rules
Driving
without a
license

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Road safety in China
 Developed regions usually have more traffic accidents since they are densely populated. Thus, car owners from developed
regions have a higher demand for auto insurance.
 Also, some areas are more prone to accidents since they have more mountainous roads, such as Guizhou province.
20
Provinces
Number of traffic
accidents
Direct property
damage
Million RMB
Source: ZhiYan.org
Guangdong Guizhou
1
Shandong Jiangsu Zhejiang Hubei Anhui
2 3 4 5 6 7
23,900 14,711 13,403 13,226 12,782 11,661 11,506
104.13
Provinces ranked by number of traffic accidents
(2017)
119.94 61.83 58.18 47.73 94.86 55.41

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Vehicle sales in China
 Although 2018 marks the first year of declining vehicle sales (not including second-hand vehicles), China is still the largest
vehicle market in the world.
 The sales revenue in the vehicle market also boosts the development of the auto insurance industry.
21
13.60
16.00 16.80 17.60
21.10
23.49
24.60
28.03 28.88 28.08
0.00
5.00
10.00
15.00
20.00
25.00
30.00
35.00
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Vehicle sales in China
(million units–2009-2018)
Source: China Association of Automobile Manufactures,
China Association of Automobile Manufacturers
http://cv.ce.cn/zxz/zxzbwzg/201901/14/t20190114_31254856.shtml

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Burgeoning rental car market
 China’s car rental market is growing fast and there are many companies engaged in car rental business. Most car rental
companies are middle and small, the cars they provide are relatively cheap since they mainly target customers with low
income and credit.
 In order to reduce risks, car rental companies often need guarantees from consumers when they rent cars, which is an
opportunity for car insurance companies.
22
Source: Forward-The Economist
80 billion RMB market size in
2018 with 18% YoY growth
About 80% market share
occupied by middle and small
companies
More than 90% of rental cars are
lower than 200,000 RMB
Lower than
100,000 RMB
50%
100,000-
200,000 RMB
42%
200,000-
300,000 RMB
5%
Higher than
300,000 RMB
3%
Price distribution of Chinese vehicle rental
companies’ cars (2018)

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Drivers of China’s auto insurance market
23
The largest vehicle market in the world
 Although new vehicle sales in China declined
in 2018, the nation is still the largest car
market in the world.
 The number of drivers has risen steadily
during past several years.
 The large number of private cars and drivers
made huge market demands for insurance
and facilitated the growth of auto insurance
companies.
Online insurance platforms
 Along with widespread internet use in China,
online insurance platforms have been important
distribution channels.
 As for insurance companies, online platforms
can decrease their costs and improve sales
efficiency.
 As for consumers, those platforms can offer
one-stop services to simplify purchasing
process.
Road safety awareness
 In recent years, the public’s road safety
awareness has been enhanced through
multi-agency education and publicity. Which
greatly increased the demand of auto
insurance among car owners.
 China still has many areas with poor roads.
Car owners who live in those areas are more
willing to buy insurance.
Policy support
 The Chinese government continuously released
new policies during the past several years to
regulate the auto insurance market and support
the developing of new business model in this
field.
 New policies and regulations are helpful for
accelerating the pace of development in the
industry.
Source: https://www.iyiou.com/p/41166.html
https://www.qianzhan.com/analyst/detail/220/180208-d714389b.html
http://www.sohu.com/a/318548923_492537

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Obstacles in China’s auto insurance market
24
 Some auto insurance companies don’t have high
quality service because they focus on reducing cost
rather than improving after-sales services.
 Thus, many consumers think the attitude of staff is
ungracious.
Source: http://baogao.chinabaogao.com/baoxian/340456340456.html
Poor service
 Most claim disputes focus on two aspects:
1. Assessing the damage of vehicles. The payment of auto
insurance claims is decided by the damage of vehicles. But
some companies’ assessments are lower than consumers’
expectations.
2. Slow claims. The claim procedures are often complicated and
customers do not receive payment in time.
More claim disputes
 China’s auto insurance is still at the early stages,
there were frequent insurance scams during the past
several years.
 Therefore, how to effectively prevent and curb
insurance fraud has become an urgent problem to be
solved in the auto insurance industry.
Insurance scams
 In order to attract more clients, many auto insurance
companies slashed prices and increased the rate of
compensation. Therefore, some small and medium
companies cannot collect enough revenue to cover
their expenditures.
High market entry threshold

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Key characteristics of
Chinese consumers
25
2

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Consumer analysis: The main consumers
26
Source: 2018 Chinese insurance consumers White paper by CPIC, PWC
75.8%24.2%
The gender distribution of China’s auto
insurance consumers (2017)
Men
Women
Men are the main consumers of auto
insurance since most drivers are men.
However, more Chinese women have
become drivers and car owners recently.
They started to buy commercial insurance
for their cars.
Gender of auto insurance buyers
Currently, 31-40 year olds are the main
consumers of auto insurance in China.
However, the number of 25-30 years old
consumers is consistently growing as there
are more and more young people buying
cars.
Age of auto insurance consumers

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Consumer analysis: Where do they buy auto insurance
27
Cheap
Telephone sales generally
come directly from
insurance companies.
Thus, auto insurance in
telephone sales is usually
cheap because there is
no middleman.
Concealing terms
In order to have better
sales performance, some
sales people may conceal
some unfavorable terms
during the phone call.
Cheap
Offline insurance
agencies can provide
relatively cheap car
insurance and different
kinds of rebates to car
owners.
They have fast claim
settlement services too.
Need to have related
knowledge
Consumers must have a
good understanding of
different types of auto
insurance to pick the most
suitable option.
Convenient
On online platforms, fast
purchasing and more
discount activities can save
time and money for many
consumers. Additionally,
they are transparent during
the claim process.
Convenient
By working with insurance
companies, most 4S stores
provide auto insurance.
Consumers can easily get
insurance after buying cars
there.
They also offer claim
settlement services to save
buyers time.
Expensive
Auto insurance from 4S
stores is usually more
expensive than other
purchasing channels.
Disadvantages
Telephone
sales
Offline
insurance
agencies
Online
platforms
4S stores
(4S = sale + spare part +
service + survey)
Need to find reliable
platforms
There are so many
platforms that are offering
auto insurance in China, it’s
not easy to pick reliable
ones.
Advantages

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Consumer analysis: Purchase reasons (1/2)
Factors that influence the Chinese consumers demand of auto insurance:
28
Source: https://www.ixueshu.com/document/cccf49a3b806afc77d721b29bfac1625.html
Car use and repair costs
Fuel and repair costs affect auto
insurance purchases. Excessive fuel
costs would reduce the automobile usage
to a certain extent. For repair costs, it’s
one of the factors that consumers
consider when they buy auto insurance in
order to control the costs.
Educational backgrounds
As a special commodity, consumers
who purchase auto insurance usually
have stronger consciousness of safety
and insurance-related expertise.
Therefore, higher educated people will
have more purchasing awareness and
demands for auto insurance.
Public transportation
The development of the transportation
industry reflects the proportion of public
transportation to private cars. Thus, in
some areas with underdeveloped public
transport, people are more likely to drive
private cars, leading to a higher demand of
insurance.
The income level
For individuals or families with higher
income levels, they improve their living
standards. Therefore, those people with
stronger purchasing power are more
willing to buy cars so that increase the
potential consumption of auto
insurance.

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Consumer analysis: Purchase reasons (2/2)
29
 “Faster claim settlement” is the most important factor when it comes to auto insurance companies.
 Consumers prefer to choose insurance companies with lower premium and more services provided.
Source: https://www.wjx.cn/report/3861118.aspx
27%
28%
28%
28%
36%
39%
45%
49%
61%
0% 20% 40% 60% 80%
Sales promotions
Value-added services
Name awareness
State of operation
Quality of employees
Public praise
Insurance policies
Quality of services
Faster claim settlement
Factors customers consider when choosing an auto
insurance provider
58%
31%
47%
22%
17%
4%
Reasons for switching auto insurance providers
Lower insurance premium
4S shops recommendation
More value-added services
Special sales promotion
Loss of trust in the previous company
Others

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30
On Zhihu, the most common questions and posts about
auto insurance consist of the following:
• Which types of auto insurance should car owners buy?
• What should be paid attention to when buying auto
insurance and subsequent claims?
• Is it an imparity clause that the bundling sales of the auto
insurance in 4S stores?
Zhihu
Zhihu is the first Q&A website in China, and has transitioned to a social media
sharing platform gathering more than 100 million answers on various topics. The
platform is especially relevant to reach higher-, well-educated social classes
Consumers’ questions on Zhihu
Screenshot of Question
Screenshot of Answer
Q: What should we pay attention to when buying auto
insurance and the subsequent claims?
1. The differences of insurance between new and old cars
2. What’s the standard of claim settlements?
3. Is there any relationship between the number of car
accidents and discounts for auto insurance?
4. How does needing to compensate affect to the insurance
seller and the accident scene investigator?
5. Does auto insurance only cover cars?
6. What should I know when buying auto insurance?
7. Are there any changes after the new regulations?
418 K
Q: Which types of auto insurance should car owners buy?
The compulsory third-party liability insurance was mandatory by
law, therefore, each car owner should primarily buy the
compulsory auto insurance before others. Also, car owners can
choose the different types of commercial motor insurance that
related to their own situations. Therefore, which types are
recommended for car owners to buy?
1.6 M

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31
Positive perceptions on Weibo & WeChat:
• Auto insurance can cut consumers’ losses in traffic
accidents.
• Auto insurance can protect car owners’ legitimate rights.
• For car owners, there are more purchase channels
(online and offline) for them to select the insurance
types carefully.
Weibo
For car owners, auto insurance can save a lot of repairing costs of
car damage and can have better repairing services. Secondly,
they can receive compensation in time to get medical treatment..
Lastly, their legitimate rights will be protected during traffic
accidents. On the other hand, auto insurance can make drivers
pay more attention to security while driving.
WeChat
The premium is generally based on the types of auto insurance
that car owner chooses to buy. Therefore, it needs to choose
proper types so that the risks can be minimized. There are
multiple categories of auto insurance but it’s not necessary to pay
them all. Additionally, car owners should also possess the
detailed information about those so-called additional risks that
introduced by insurance companies.
Consumers’ positive perceptions
WeChat
WeChat is the #1 social media in China and an absolute must-have for a
market entry promotion. It accounts for over 1 billion active users.
Weibo is China’s biggest social media network that was launched in 2009.
Over the past years, it has transformed from a Chinese equivalent of
Twitter to a comprehensive platform.Weibo
52 K
26 115

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32
The main problem of the car insurance market is the very high
service charge of insurance intermediary agent. The high
service fee from insurance agencies caused a lot of losses on
car insurance sales business.
Negative perceptions on Weibo & WeChat:
• The significant conflicts of interests between auto
insurance sales in 4S stores and insurance companies
will lead to extra costs for consumers.
• Some insurance companies are fraud, because they only
care about the profit instead of providing car owners with
the proposals of risks management.
Weibo WeChat
The main issue of the auto insurance industry in China is the
insufficient ability to manage and adapt the new trends. Since
the influence of the Internet and new regulatory
implementations, insurance companies need to find a way to
reduce costs for consumers and increase their market share.
WeChat
WeChat is the #1 social media in China and an absolute must-have for a
market entry promotion. It accounts for over 1 billion active users.
Weibo is China’s biggest social media network that was launched in 2009.
Over the past years, it has transformed from a Chinese equivalent of
Twitter to a comprehensive platform.Weibo
Consumers’ negative perceptions
304 112 30 11 K

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33
New business models in China’s
auto insurance market
3

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Car insurance business models
 The traditional business model brings a heaven burden to the development of car insurance in China, many companies already
started to use the new business model.
34
New business model Traditional business model
• Car insurance online. Internet
plays a very important role in the
new business models of the auto
insurance industry in China.
Insurance companies can
effectively reduce costs by
gradually replacing offline
distributors with online platforms.
• Regarding users’ needs as the
core. Auto insurance companies
build precise consumers profiles
through big data, they are able to
carry out precision marketing and
improve claim settlement services.
• Sales agents. Most China’s
insurance companies sell their car
insurance through sales agents,
such as 4s stores. Those
distributors usually secure high
margins by increasing the price of
insurance.
• High costs and investments. In
order to have more market share,
many insurance companies are
keen on setting up branches in
different cities and starting price
war, resulting in higher costs.
V.S

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Traditional business model
 Telephone sales, 4s stores, garages and insurance agency firms are the main sales channels of traditional business model.
 Offline distributors (4s stores, insurance agencies, etc.) usually gain higher revenue than insurance companies since they have
more bargaining power.
35
Auto insurance
companies
Consumers
Telephone
sales
Insurance
agency firms
4S stores Garages
Offline sales
channels

ALL RIGHTS RESERVED
New business model
 The new business model is centered around online sales & promotions rather than offline. This decreases costs and improves
services. Self-operated and third-party platforms are the main sales channels of the new business model.
36
Auto insurance
companies
Companies’
websites
Mobile apps
Consumers
Third-party platforms
(They usually have heavy traffic)
Self-operated platforms

ALL RIGHTS RESERVED
Innovation in auto insurance-Usage based insurance
 Usage-based insurance (UBI) also known as pay as you drive (PAYD) and pay how you drive (PHYD) and mile-based auto
insurance is a type of vehicle insurance where the costs are dependent upon the type of vehicle used, measured against time,
distance, behavior and place.
37
1. Install UBI devices in vehicles or
download UBI mobile app.
2. Collect the data of driving
behaviors, time, distance,
etc. Then send the data to a
UBI system/platform.
3. The UBI system will parse the data of
vehicles and driving for later reuse.
4. Auto insurance companies can make
precision marketing strategies
(including price) targeting specific
groups.

ALL RIGHTS RESERVED
Leading brands (1/2)
 China’s auto insurance market is dominated by large domestic brands.
 Due to the scarce insurance licenses and fierce competition, small and medium-sized companies are difficult to grow with
the traditional business model.
39
32%
22%
12%
34%
Market share of the auto insurance companies in China
(2018)
PICC
PING AN
CPIC
Others
249.2
170.6
81.8
53.7
27.3
PICC PING AN CPIC China Life
Insurance (Group)
Company
China Continent
Insurance
The auto insurance revenue of the top 5 auto insurance
companies in China (billion RMB, 2017)
Source: https://www.qianzhan.com/analyst/detail/220/190410-159875cf.html
Source: https://t.qianzhan.com/caijing/detail/181018-ae68e006.html

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Leading brands (2/2)
 In large auto insurance companies, the payment of car insurance claims usually occupies 70% of their total payments.
 Third-party distributors (such as 4S stores, agencies, etc.) are very important distribution channels for the Chinese auto
insurance companies.
40
139.4
89.6
45.9
29.1
PICC PING AN CPIC China Life Insurance
Auto insurance companies’ payment for
insurance claims (billion RMB–2018)
Source: https://www.qianzhan.com/analyst/detail/220/190410-159875cf.html
https://t.qianzhan.com/caijing/detail/181018-ae68e006.html
In 2018, 90% of CPIC’s
auto insurance sales
revenue came from third-
party distributors.
In 2018, 70% of PICC’s
auto insurance sales
party distributors.
In 2018, 84% of PING
AN’s auto insurance sales
party distributors.

ALL RIGHTS RESERVED
Case study-PICC
 PICC is one of the largest insurance companies in China, it is also leading the car insurance market.
 The company is devoted to fast auto insurance claims and excellent after-sales services.
41
Type of insurance
PICC provides 9 types of auto insurance for different
purposes, one example is coverage for scratched
and broken car windows. The company gives crisp
and clear introduction of its insurance products.
Online purchase
Currently, owners of private vehicles have no more
than 9 seats (including 9 seats) can directly
purchase PICCs auto insurance on its website and
pay by Alipay or WeChat.
As one of the main advantages of the company, PICC provides several kinds of after-sales
services to consumers:
1. 24-hours damage assessment service.
2. Free rescue service in mainland China. Consumers can ask road rescue services for free
within 100 km of any mainland China’s cities.
3. Air rescue service. In an emergency consumers can ask for a helicopter rescue.
4. Insurance claims through mobile phones. Private car consumers can directly use PICC’s
mobile app or its WeChat public account for claims.
5. Super fast claims under given conditions. When consumers have accidents with unilateral
liability and losses below 10,000 RMB, the claim process can be finished around 1 hour.
After-sales services

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Case study-PING AN (1/2)
 PING AN is a Fortune 500 enterprise, also a leading brand in China’s auto insurance market.
42
 PING AN has around 40 million car insurance
consumers.
 PING AN has achieved high customer
satisfaction for many years.
Fast purchase
Through the website of PING AN, consumers only need 3 steps to
buy car insurance: information filling, get quotes and pay insurance
fees (mobile or bank cards). Then consumers will receive a contract
and certificate in 2 days by mail.
Easy process for claims
When consumers have accidents with clear/unilateral liability and no
injuries, they can apply for a fast claim through the mobile app receive
the payment in 3 days. No matter where consumers purchased the
insurance, they can have the same process for claims in China.
Free road rescue
For the consumers who have cars with less than can 12 seats, they
can use road rescue services from PING AN for free within 100 km
away from any city.
Source: iYiou.com, Qianfan.Analysys.com, PING AN official website

ALL RIGHTS RESERVED
Case study-PING AN (2/2)
43
PING AN’s mobile app uses AI technology to
offer full-automatic claims.
By the June of 2019, PING AN’s mobile app
had 70 million registered users, there were
16 million active users among them.
PING AN uses its mobile app as a tool to
provide one-stop insurance service.
Vehicle
damage
assessment
Source: PICC Financial report, PING AN official website
The main functions of PING AN App
Inquiry
traffic
violation
records
Apply for
road rescue
Apply for
annual
inspection
Locating
parking
places
Self-service
claims
Search for
insurance
policies
Buy/renew
car
insurance
Mobile APP- PING AN Car Owners (平安好车主)
Online
customer
service
One-stop vehicle insurance service app
PING AN app is now the most popular
vehicle insurance mobile app. It’s also a
leading app in China’s vehicle aftermarket.

ALL RIGHTS RESERVED
Case study-Autohome.com (家家金融)
44
• Discount
Consumers can customize car insurance with 20%-30% discount
on the website.
• One-stop services
By downloading the App, consumers can buy insurance, have free
counseling and apply annual vehicle inspection.
• Fast claim settlement
Car insurance consumers can get paid a premium directly on the
website in a short time.
• Value-added services
The platform also offers emergency rescue and designated driving
services.
The main advantages
Source: https://baoxian.autohome.com.cn/pc/home?pvareaid=6833485
Autohome Inc. was founded in 2006. It is the leading online destination for
automobile consumers in China. The mission of Autohome is to engage,
educate and inform auto consumers in China with everything they need to
know about buying, using and selling cars. Now, the platform also provides
auto insurance as an online distributor.

ALL RIGHTS RESERVED
Case study-CheChe.com (车车车险)
45
Source: http://www.cheche365.com/website/category/cheche_insur/
 Consumers can directly
buy car insurance on the
website and receive
insurance policies by
mail.
 The whole process can
be finished in a few
days.
 The platform provides auto
insurance from more than
15 different companies.
 Consumers can easily
compare different types of
insurance and their prices
directly from the website.
1. Convenient process 2. More options
 The platform offers customized
service that gives consumers
suggestions about auto
insurance based on their cars’
situation, such as the age of
cars.
3. Customized programs
 Through the platform,
consumers can learn about
different car insurance
options to pick suitable
insurance.
4. Knowledge
AdvantagesCheChe.com was launched in 2015. It is a online insurance transaction
platform with vehicle insurance products from different companies. It allows
consumers to purchase auto insurance online through WeChat, mobile APP
and official website.

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Trends
Nowadays, vehicle insurance consumers need more after-sales services such as quick damage
assessment, free road rescue, traffic law consulting, etc. Therefore, most auto insurance companies
responded to the market trend by launching thoughtful and precise services.
Traditional sales channels (offline agencies) bring high costs to insurance enterprises, many brands
already started to use online methods (websites and mobile apps) as their main sales channel.
Strongly backed by new technology, auto insurance companies can collect driving behavior data and
public traffic data. Then use those info to make dynamic pricing strategy, such as Usage Based
Insurance (UBI) pricing method.
I.
II.
III.
Service is increasingly important
Internet is becoming a essential channel
The traditional pricing model is changing
47

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