Cheche Group Inc (Cheche), a leading auto insurance technology platform in China, has entered into a strategic partnership with Wuhan Dongfeng Insurance Broker Co Ltd (Dongfeng Insurance), the insurance arm of Dongfeng Motor Group Company Limited (Dongfeng Motor Group).
This collaboration marks a significant step in Cheche’s ongoing efforts to strengthen its presence in the burgeoning new energy vehicle (NEV) sector.
Dongfeng Insurance, which manages the insurance needs for all brands under the Dongfeng Motor Group umbrella, is partly owned by Dongfeng Motor Group, holding a 49.5% stake in the brokerage. As one of China’s key state-owned automotive giants, Dongfeng Motor Group manufactures and markets an array of brands, including Fengdu, Aeolus, Forthing, VOYAH, M Hero, and NAMMI. Additionally, the group is involved in joint ventures with several international automakers, such as Dongfeng Honda, Dongfeng Nissan, and Dongfeng Peugeot-Citroën.
Focus on VOYAH and Future Expansion
The partnership between Cheche and Dongfeng Insurance will initially concentrate on VOYAH, Dongfeng Motor Group’s premium NEV brand. Through this alliance, Cheche will provide nationwide licensing and a suite of insurance services across VOYAH’s network of over 900 delivery stores throughout China.
Lei Zhang, founder, CEO, and chairman of Cheche, highlighted the significance of this partnership in bolstering the company’s position within the rapidly expanding NEV market.
“The Dongfeng Insurance partnership is another celebrated milestone for Cheche that further establishes our position as the leading intelligent insurance platform for NEVs in China,” Zhang stated.
This agreement follows Cheche’s recent collaborations with Beijing Anpeng Insurance Broker Co Ltd and NIO Insurance Broker Co Ltd, both established in June.
Looking forward, Cheche aims to leverage its advanced technology platform and comprehensive service offerings to deepen its collaboration with Dongfeng Insurance. The company also plans to explore opportunities to extend its digital insurance solutions to other brands under the Dongfeng Motor Group, maintaining a focus on both NEV and traditional vehicle markets.
Motor Insurance Market Poised for Growth Amid NEV Surge
China’s motor insurance market is set for robust growth, with a projected compound annual growth rate (CAGR) of 5.4%. Gross written premiums (GWP) are expected to rise from CNY 912.2 billion (US$127.4 billion) in 2024 to CNY 1,125.7 billion (US$158.9 billion) by 2028, according to GlobalData forecasts.
Research from GlobalData indicates that the sector will experience 5.2% growth in 2024, driven by rising vehicle sales, increased demand for NEVs, and favorable regulatory changes.
According to the China Association of Automobile Manufacturers (CAAM), vehicle sales in China saw a 10.6% increase in the first quarter of 2024, reaching 6.72 million units. Government policies, including purchase tax exemptions for NEVs and trade-in subsidies, are expected to further stimulate the growth of the motor insurance market in the coming years.
NEVs made up 30% of total vehicle sales in the first 10 months of 2023, with China’s global market share for new energy passenger vehicles climbing from 41% in 2020 to 65% in 2023.
“Growing demand for new and next-generation vehicles will support the growth of China’s motor insurance industry during the next five years,” said Sutirtha Dutta, an insurance analyst at GlobalData.
However, Dutta cautioned that the sector might face challenges from higher claim payouts and rising accident rates, potentially impacting profitability in the short term.
