Cheche Group Inc (Cheche), a prominent auto insurance technology platform in China, has announced a new strategic partnership with Wuhan Dongfeng Insurance Broker Co Ltd (Dongfeng Insurance) – the insurance affiliate of Dongfeng Motor Group Company Limited (Dongfeng Motor Group).
This move is part of Cheche’s ongoing effort to expand its partnerships within the new energy vehicle (NEV) industry.
Dongfeng Insurance manages the insurance operations for all brands under Dongfeng Motor Group, which holds a 49.5% stake in the brokerage. The group is one of China’s major state-owned automotive companies, producing and marketing brands such as Fengdu, Aeolus, Forthing, VOYAH, M Hero, and NAMMI, as well as vehicles from joint ventures with foreign automakers like Dongfeng Honda, Dongfeng Nissan, and Dongfeng Peugeot-Citroën.
The collaboration between Cheche and Dongfeng Insurance will initially focus on VOYAH, Dongfeng Motor Group’s luxury NEV brand.
Under the partnership, Cheche will offer national licensing and a range of insurance services across VOYAH’s network of over 900 delivery stores throughout China.
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Lei Zhang, founder, CEO, and chairman of Cheche, said the strategic alliance opens up new opportunities for the company as China’s adoption of NEVs continues to rise.
“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,” he said.
The deal with Dongfeng Insurance follows Cheche’s partnerships with Beijing Anpeng Insurance Broker Co Ltd and NIO Insurance Broker Co Ltd in June.
Looking ahead, Cheche intends to use its technology platform and service offerings to deepen its partnership with Dongfeng Insurance. It also plans to explore opportunities to expand its digital insurance solutions to other brands within Dongfeng Motor Group, continuing to focus on both NEV and traditional vehicle markets.
China’s motor insurance market is projected to grow at a compound annual growth rate (CAGR) of 5.4%, with gross written premiums (GWP) 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 forecasts from GlobalData.
Research from GlobalData suggests that the sector will see 5.2% growth in 2024, supported by increasing vehicle sales, growing demand for NEVs, and favourable regulatory changes.
Vehicle sales in China increased by 10.6% in the first quarter of 2024, reaching 6.72 million units, according to the China Association of Automobile Manufacturers (CAAM). The government’s policies, such as a purchase tax exemption for NEVs and a trade-in subsidy, are expected to further support the growth of motor insurance in the coming years.
NEVs accounted for 30% of total vehicle sales in the first 10 months of 2023, with China’s global market share for new energy passenger vehicles rising 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 warned that the sector could face challenges from higher claim payouts and increasing accident rates, which may affect profitability in the short term.
