BYD Acquires an Internet Insurance Company for $530M

According to Chinese business data question platform Tianyancha, BYD’s proposed acquisition value 3.6 billion yuan ($530 million) for Yi’an Property Insurance Co., Ltd. was put in place on January 31. BYD will purchase 100% fairness of the Internet insurance coverage firm.

Yi’an Property Insurance, established in February 2016, is likely one of the 4 skilled Internet insurance coverage firms permitted by the China Banking and Insurance Regulatory Commission (CBIRC). In July 2020, Yi’an was taken over by CBIRC resulting from substandard solvency and different causes. By the top of March 2022, Yi’an had property totaling 335 million yuan, liabilities totaling 462 million yuan, and shareholders’ fairness totaling -127 million yuan.

In July 2022, CBIRC agreed that Yi’an had entered a chapter reorganization process. As a consequence, accelerating the search for strategic traders has grow to be an inevitable alternative for Yi’an. Although it’s bancrupt, it has some great benefits of a flat administration construction and asset-light technique. Moreover, its personal property and liabilities are small, and it’s anticipated to enhance its solvency via restricted funding.

Prior to this, BYD had begun to organize to enter the insurance coverage trade. In March 2022, BYD Insurance Brokerage Co., Ltd. was permitted to be established.

In truth, it’s common for car producers to arrange insurance coverage firms. XPeng, Tesla China, and NIO established their very own insurance coverage divisions in 2018, 2020, and 2022 respectively. GAC Group, FAW Group, and Geely have all taken stakes in insurance coverage certificates holders.

According to trade insiders, auto insurance coverage is the primary service that buyers come into contact with when shopping for a automotive. In the previous, auto gross sales terminals have been primarily managed by sellers, so that they have a very powerful gross sales channels for auto insurance coverage. The just-needed attribute of auto insurance coverage allows sellers to manage the service entrance of automotive house owners, thus increasing the automotive aftermarkets enterprise comparable to auto upkeep, claims restore and auto finance.

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For car producers, with out acquiring an insurance coverage license or an insurance coverage middleman license, it’s essential to cooperate with third-party insurance coverage firms. If they’re straight concerned, they will try for higher revenue margins and prolong their very own industrial chain. It can be doable for them to make use of auto operation information and upkeep information to be extra correct in auto insurance coverage insurance policies and payouts, differentiated pricing, and unique insurance coverage.

In addition to coming into the insurance coverage trade, BYD additionally turned its consideration to auto finance, monetary leasing, and personal fairness. Taking auto finance as an instance, BYD and the Bank of Xi’an collectively funded the institution of BYD Auto Finance Co., Ltd. in 2014, with BYD holding 80% of shares, which is likely one of the 25 licensed auto finance firms permitted by CBIRC.

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