(Yicai) May 7 -- The insurance subsidiary of Chinese car and battery giant BYD has received regulatory approval for its statutory auto liability insurance business, bringing it one step closer to launching its car insurance products.

BYD Property Insurance, the first insurer owned by a Chinese carmaker, was permitted to use the national uniform SALI terms, basic premium rates, and corresponding rate adjustment factors in Anhui, Jiangxi, Shandong (excluding Qingdao), Henan, Hunan, Guangdong, and Shaanxi provinces, as well as in Shenzhen, where BYD is headquartered, the National Financial Regulatory Administration announced yesterday.

China's auto insurance system consists of SALI terms and commercial car insurance. The SALI business must adhere to China's unified terms and basic premium rates. After the SALI terms approval, BYD Property Insurance must wait for the regulatory nod of the commercial auto insurance terms before launching its car insurance products.

BYD bought the bankrupt and restructured Yi'an Property Insurance in May last year and renamed it to enter the insurance industry. Last November, the NFRA approved BYD Property Insurance to add a car insurance business to its operations.

The number of new energy vehicles in China has surged in recent years and reached 20.4 million as of the end of last year, accounting for 6 percent of all autos in the world's biggest car market and boosting demand for related insurance products.

However, due to the rapid iteration of electric vehicle technologies, insurers face difficulties in risk assessment and pricing for these autos, resulting in higher premium prices than those for conventional fuel-powered cars.

Compared to traditional insurers, NEV makers have a more thorough understanding of customer information, driving habits, and vehicle risks, industry experts told Yicai. They can leverage this information to classify customers, allowing them to provide accurate pricing and offer enhanced car insurance services, they added.

Editors: Dou Shicong, Martin Kadiev