Under the main theme of “cutting prices, increasing insurance, and improving quality”, the comprehensive auto insurance reforms implemented on September 19 last year have reached their first anniversary. What changes and adjustments have been made to the auto insurance industry in one year?
Reduce consumer spending by over 170 billion yuan
The data released recently by the China Banking and Insurance Regulatory Commission show that since the start of the comprehensive auto insurance reform on September 19 last year, Accumulatively reduced expenditures for Chinese auto insurance consumers by more than 170 billion yuan, and the phased goals of “decreasing prices, increasing insurance, and improving quality” have been basically completed. The auto insurance market has shown a “double drop” in premium prices, handling fee rates, and insurance liability limits, and commercial auto insurance purchases Rate the new situation of “double rise”.
Many car owners in Shanghai, Beijing, Yunnan, Inner Mongolia and other places told the news that car insurance premiums have dropped after the comprehensive reform of car insurance. A car owner in Beijing owns both a petrol vehicle and a new energy vehicle. He told the news that the premiums of petrol vehicles have been relatively stable. Now they drive more new energy vehicles, and new energy auto insurance premiums have dropped by more than 20% from last year.
However, some car owners in Shanghai told the news that car insurance premiums are about to expire. Under the circumstance that the content of the insurance is almost unchanged, the quotations given by many insurance companies are more Last year it was much higher, with compulsory traffic insurance prices unchanged, and commercial insurance premiums rising by about 27%. In terms of the time of the comprehensive reform of auto insurance, its auto insurance expires in October, which also means that the person will purchase auto insurance for the second time after the comprehensive reform of auto insurance.
Actually, the case of car insurance premium increase is not an isolated case. In terms of amount and other factors, the insurance company will give less premium discounts for customers who have repeatedly claimed and repaired models with abnormally high maintenance costs. As a result, the premiums of these customers will rise to a certain extent, which is also in line with premiums and compensation. The market decision principle of matching cost.
Car insurance premium income of property and casualty insurance companies declined year-on-year
As of the end of July, the average premiums paid by vehicles were 2,774 yuan, a 21% decrease from the pre-reform period, 88 % Of consumers’ insurance premiums have fallen. Correspondingly, it is the decline in insurance premium income. From the data disclosed by many listed insurance companies, it can be seen that due to the comprehensive reform of auto insurance, in the first half of this year, the auto insurance premium income of PICC P&C, Ping An Property & Casualty, and CPIC Property & Casualty all declined in the first half of this year.
Among them, PICC P&C auto insurance premiums were 120.755 billion yuan, a year-on-year decrease of 7.8%; original insurance premiums in the first half of the year fell 6.9% year-on-year to 89.015 billion yuan; CPIC P&C achieved auto insurance business income of 44.642 billion yuan , A year-on-year decrease of 6.9%.
Ping An Property & Casualty Insurance said in a news interview that the comprehensive reform of auto insurance is a comprehensive reform that involves terms and rates. , Regulatory systems, and other aspects. The phased goal of the reform is to reduce prices, increase insurance, and improve quality. As one of the main players in the market, Ping An Property & Casualty is also affected accordingly. As the absolute main insurance type in the property insurance market, auto insurance is in the Ping An Property & Casualty business It accounts for about 66%. After the reform, the premiums “shrink”, which will bring certain challenges to the company’s operations in the short term, mainly reflected in the decline in the overall underwriting profit rate. However, the short-term pressure is a driving force in the long-term.
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“Customer management is inseparable from the comprehensive reform of auto insurance. The comprehensive reform of auto insurance makes the management space of insurance companies very small. Judging from the actual operating results, quite a few companies in the industry have suffered losses due to increased compensation and inability to reduce operating costs. “CPIC Property & Casualty Chairman Gu Yue said in an exclusive interview with news and other news in May this year that in the past, in the product dimension, the pursuit of greater absolute value increase was more, and more was increasing. Nowadays, The operation in the customer dimension is more about the in-depth excavation of the average customer value.
The comprehensive reform of auto insurance is forcing property insurance companies to transform, refined, lean, and Accuracy is becoming the “keywords” of the auto insurance industry. Yu Ze, Vice President of PICC and President of PICC P&C Insurance, pointed out at PICC’s 2021 interim results conference that we will continue to strengthen channel construction in the second half of the year and improve customer online In particular, continue to strengthen the construction of its own channels. PICC’s renewal service team, including its own direct sales channels, fully reflects the advantages of removing intermediaries and fewer intermediate links. At the same time, it is necessary to gradually strengthen the “car life” ecology Circle construction, and give full play to the role of customer acquisition, retention, and customer renewal.
“The strong one is always strong”, what should small and medium-sized insurance companies do?
Due to the decline in the average single premium, the increase in the loss ratio and the decrease in the expense ratio, the result is The comprehensive loss ratio of auto insurance showed a substantial increase in phases. However, in the auto insurance market, scale has always been a major focus that companies hope to keep. Under the pressure of comprehensive reforms, service levels and cost capabilities are naturally “a battleground for military experts.” It is obvious that small and medium property insurance companies do not have the scale and pricing advantages of leading insurers.
Judging from the current situation, the logic of “the strong always keep strong” still makes sense in the auto insurance industry. Yu Ze, the president of PICC P&C, publicly stated that PICC P&C has the largest group of auto insurance customers. With a large amount of risk pricing data, we can see that PICC P&C’s pricing advantage has been fully reflected after the comprehensive reform. PICC P&C’s scale advantage is also obvious, with large premiums and the advantages of premium dilution scale costs in the industry. Fully reflected.
The above-mentioned Shanghai car owner showed the news the insurance quotations of two property insurance companies. Another small and medium-sized company’s offer was nearly 100 yuan lower. At the same time, the insurance intermediary also gave some discounts. Compared with the discounted price, the auto insurance premium of a “old three” company can be discounted by nearly 400 yuan. A small and medium-sized company’s discount is only less than 250 yuan.
Under the comprehensive reform of auto insurance, the way out for small and medium-sized property insurance companies seems to have been discussed but never seen. On the topic of the road ahead. An executive of a small and medium-sized property insurance company told the news that if the auto insurance business is used as a means of profit, it is necessary to shrink or choose a new route. If you are careful and do not scale, branches can choose to bring auto insurance Profitable business.
“The result of such a choice is definitely a shrinkage of scale. “The above-mentioned small and medium property and casualty insurance company executives stated that they are too much affected by human factors. Some agency leaders can do it while others cannot. There are several possibilities for scale effect. One is that personal goals are inconsistent with the company’s interests. , To achieve personal goals through a large scale. Second, the headquarters wants to change, but cannot establish an effective policy transmission mechanism, so that the interests of the grassroots are still linked to the scale. Third, the fluke psychology of the market turning for the better still exists.
Under the comprehensive reform of auto insurance, many companies have proposed to vigorously develop non-automotive business during this window period. Data from the China Banking and Insurance Regulatory Commission also shows that, through the reform, the proportion of auto insurance business in property insurance business It dropped to 51.8%, a year-on-year decrease of 5.4%, and the proportion is basically close to the average level of major world economies such as the United States (43%) and Japan (50%).
For small and medium-sized property insurance companies, it is not the development of non-automotive business that can hedge the pressure brought by the comprehensive reform of auto insurance. A person from a property insurance company told the news that at present, the benefits of many non-automotive businesses are even worse than auto insurance. There is another auto insurance. The situation is to consider the fund precipitation rate. Considering the investment income, a little bit higher than 100% of the comprehensive cost ratio is still valuable.
However, relying on a slightly higher investment incomeCan it be a long-term solution to make up for the loss of auto insurance underwriting, and how to maintain a high investment yield at the moment of low interest rates? The topic of non-car transformation has already been discussed. Under the pressure of the comprehensive reform of auto insurance, how will the non-car business make the cake bigger and better? How to change the attitude of small and medium insurance companies on the auto insurance business may be a point worthy of attention in the next stage of the comprehensive reform of auto insurance.
New challenge: How to do a good job in the new energy auto insurance market
In fact, in the auto insurance business, it is now not just the “world” of fuel vehicles . The vigorous development of new energy vehicles has also spawned the demand for exclusive clauses for new energy vehicle insurance. The premium income of new energy vehicles is increasing rapidly, but the overall loss ratio is slightly higher than that of traditional fuel vehicles. Many senior executives of listed insurance companies discussed the issue of new energy auto insurance at the recent interim results conference.
Gu Yue, chairman of CPIC Property & Casualty Insurance, said that due to various factors, the overall compensation situation of new energy vehicles is not ideal. From the perspective of CPIC, how to deal with the new energy vehicle market and better control it in accordance with the new new energy vehicle terms and rates of the China Banking and Insurance Regulatory Commission is a major aspect of the next development of CPIC Property & Casualty.
PICC P&C President Yu Ze said that it is expected that new energy vehicle rates will still be based on model pricing, and the premiums between different models will rise and fall. Faced with the high payout ratio of new energy vehicles or high frequency of insurance, PICC P&C will implement the pricing of new energy vehicles to further leverage PICC’s advantage in pricing.
When talking about how to break the situation when new energy vehicle compensation is not ideal, a person from Ping An Property & Casualty told the news that, internally, Ping An Property & Casualty has developed new The exclusive underwriting model for energy vehicles improves the level of new energy risk screening. On the claims side, based on the unique risks of new energy vehicles, it develops new energy claims risk control rules and optimizes new energy vehicle claims costs; externally, Ping An Property & Casualty is actively exploring cooperation with OEMs and battery factories to jointly optimize new energy vehicle claims costs.
The first anniversary of the comprehensive reform of auto insurance, the results achieved and the problems that have arisen have attracted attention from all walks of life. The heads of relevant departments of the China Banking and Insurance Regulatory Commission told the news that the China Banking and Insurance Regulatory Commission is conducting a summary analysis of the industry situation in the past year and will put forward relevant opinions and suggestions through a press conference.