In September this year, the comprehensive reform of automobile insurance (hereinafter referred to as the "comprehensive reform of motor insurance") has been implemented for three years. "The comprehensive reform of auto insurance has achieved the expected results, but the reform is still difficult to solve all the problems at once, and it is expected that the reform will continue to deepen." Jiang Lingyun (pseudonym), who was in charge of car insurance business in three property insurance companies and is currently the general manager of the Dalian branch of a property insurance company, told reporters.
At the beginning of this year, the former China Banking and Insurance Regulatory Commission (CBIRC) further expanded the range of auto insurance self-pricing coefficients on the basis of the comprehensive reform of auto insurance implemented in September 2020, and required that it be fully implemented by the end of May. Up to now, the adjustment of the auto insurance self-pricing coefficient range has been fully implemented for more than 9 months.
In order to better understand consumers' demands in car insurance pricing and services, as well as whether insurance companies have valuable services other than gift contracts in their marketing, the reporter conducted face-to-face interviews or questionnaire surveys with more than 30 car owners. Most of these car owners said that they hope that car insurance prices will be more favorable and car insurance services will be better in the future. In terms of service, car owners value the convenience of claims the most.
On the whole, the auto insurance market involves a large number of insurance companies and consumers, and forming a more stable and mature market requires the joint efforts of all parties.
The milestone has been achieved
How well are consumers aware of the comprehensive reform policy of motor insurance? The reporter interviewed Qin Chuan, a car owner, at a Volkswagen 4S store in Beijing's South Third Ring Road, and he told reporters: "I only know the overview, I don't know the details, but I feel some changes in car insurance in recent years." ”
Qin Chuan has a Volkswagen Magotan car purchased in 2016. Recalling the experience of car insurance in recent years, Qin Chuan said that the premium in the first year was relatively expensive, and since then, the premium has basically decreased every year. The biggest change is that in 2021, the terms of car insurance have changed when applying for insurance, for example, the protection liability of compulsory insurance has been increased from the previous 12,2 yuan to 20,100 yuan, and insurance types such as engine wading no longer need to be purchased separately. This year, he increased the sum insured for third-party liability insurance from 200 million yuan to <> million yuan. "Total premiums have decreased slightly, but insurance liability has increased significantly and value for money has improved." Qin Chuan said.
Qin Chuan's experience is in line with the auto insurance reform implemented in recent years. The comprehensive reform of motor insurance, which began on September 2020, 9, includes optimizing the pricing model of motor insurance and recalculating the pure risk premium of the commercial auto insurance industry. For the discretionary pricing factor, the key factor in the car insurance pricing formula, the first step is determined to be [19.0, 65.1]. The reform lowers the cap on surcharge rates for commercial auto insurance products from 35% to 35%, and increases the expected loss ratio from 25% to 65%.
"One of the reactions this reform has triggered in the end market is the decline in the average vehicle premium." In the office near Deshengmen in Beijing, Zhong Cheng, co-CEO of Auto Technology, told reporters that the reform has not only improved the degree of car insurance protection, but also consumers have taken the initiative to increase their protection responsibilities because of the decline in premiums, such as the amount of three liability insurance has been significantly increased.
Data shows the effectiveness of reforms. According to the relevant person in charge of the former China Banking and Insurance Regulatory Commission, as of the end of September 2021, the first anniversary of the comprehensive reform of automobile insurance, the average premium paid by vehicles was 9,2763 yuan, which was 21% lower than before the comprehensive reform of automobile insurance, and 87% of consumers' premium expenditure decreased; At the same time, the comprehensive expense ratio of automobile insurance in China was 27.8%, down 13.5 percentage points year-on-year, of which the handling fee rate of automobile insurance was 8.4%, down 7.2 percentage points year-on-year. "Lowering the level of surcharge rates and appropriately liberalizing the discretionary pricing factor are the main reasons for these changes." Zhong Cheng said that the comprehensive reform goals of car insurance such as price reduction, insurance increase and quality improvement have been well achieved.
At the beginning of this year, the former China Banking and Insurance Regulatory Commission once again stated that since the implementation of the comprehensive reform of auto insurance for more than two years, the auto insurance market has been stable and orderly, consumers have generally benefited, and the operating level of property insurance companies has been significantly improved. On the basis of the comprehensive reform of motor insurance, the former China Banking and Insurance Regulatory Commission issued the Notice on Expanding the Floating Range of the Voluntary Pricing Coefficients of Commercial Motor Insurance, expanding the floating range of the voluntary pricing coefficients of commercial automobile insurance from [0.65,1.35] to [0.5,1.5], and required that it be fully implemented by the end of May this year.
What is the situation of the auto insurance market after the expansion of the discretionary pricing coefficient range? According to data from the Beijing Regulatory Bureau of the State Financial Regulatory Administration, from March to July this year, the premiums of auto insurance in Beijing were 3 billion yuan, 7 billion yuan, 20.20 billion yuan, 18.21 billion yuan and 21.<> billion yuan respectively.
The person in charge of auto insurance of a property insurance company in Beijing told reporters: "After the implementation of the latest independent pricing coefficient range, the overall market has not changed much, and the market competition is more rational. ”
Fees fluctuate
The comprehensive reform of motor insurance lowered the upper limit of the surcharge rate for commercial motor insurance products from 35% to 25%, a reduction of 10 percentage points. The adjustment is to improve the operating level of insurance companies, reduce costs and increase efficiency, while controlling fee competition and benefiting consumers. The reporter learned in the investigation that although the overall comprehensive expense ratio of car insurance has decreased significantly, the competition for car insurance fees is still fluctuating, and when the overall business situation of auto insurance is more severe or the market supervision is strict, the fee competition is relatively weak and the cost competition is more rational; Before major nodes such as half a year or year, or when market supervision is relatively relaxed, the phenomenon of cost fighting will be more serious.
For example, the end of June is a critical point for insurers to impact their half-year results, and the phenomenon of car insurance business charging fees has increased. "Generally, at this time, the handling fee will be higher than usual, which is also a common phenomenon in the industry." Zhong Cheng told reporters.
In response to this phenomenon, the regulatory authorities have noticed and sounded the alarm, requiring all property insurance companies to maintain the bottom line of compliance, and strictly prohibit blind competition for scale and share grabbing.
The comprehensive reform of motor insurance has set the upper limit of the surcharge rate at 25%, will the phenomenon of fee competition of insurance companies lead to the expense rate exceeding the limit? In response to this problem, Zhong Cheng analyzed that insurance companies can reduce the expense ratio by improving the efficiency of operation and management, reducing management costs, etc., but this is not an easy task. In the process of market competition, the more common phenomenon in the industry is to pay fees in other names by arbitraging fees, which is also a long-term criticized problem and the focus of administrative penalties by regulatory authorities.
For example, the administrative penalty information released by the State Financial Regulatory Administration on May 5 this year shows that from September 25 to August 2018, a large property insurance company failed to take effective measures to control the expenses of auto insurance business in the course of its auto insurance business, and a number of branches spent a total of 9.2020 billion yuan through business and management fees, handling fees and commissions, indirect claims costs and other items to pay for market expenses such as auto insurance fees.
"This is a common problem in the industry, and even if there is a risk of being punished, many companies still choose to do it." Zhong Cheng said. However, compared with before the comprehensive reform of auto insurance, the current phenomenon of overall market cost consolidation has been significantly weakened.
At the same time, after the auto insurance adjusts the self-pricing coefficient range, the insurance company can set the coefficient in the [0.5, 1.5] range, and the difference in car insurance quotation can be up to 3 times. If insurance companies want to compete for the market at low prices, why not directly set a lower discretionary pricing factor, and take the risk of taking the method of combining fees? A number of interviewed industry insiders told reporters that this is a very complex issue, and the core problem revolves around the sales channels of insurance companies.
"At present, China's auto insurance sales mainly rely on 4S stores and professional insurance intermediaries, etc., and the direct sales channels of insurance companies account for a small proportion, especially for small and medium-sized insurance companies, direct sales business is difficult to carry out. Intermediaries not only occupy channel advantages but also pursue profit motives, therefore, in practice, insurance companies' car insurance quotations are generally higher than the final cost paid by consumers, and intermediary channels will reduce consumer costs by giving away shopping coupons. Jiang Lingyun said that of course, the cost of these gifts is actually included in the handling fees paid by insurance companies to intermediary channels, and the handling fees paid by insurance companies are also rising.
Price and service are important
"I hope that the price of car insurance will be more favorable and the service will be better." In a large parking lot in Xizhimen, Beijing, car owner Wang Lingling said when talking about the expectation of future car insurance. At the same time, among the 30 car owners who were surveyed by reporters about the comprehensive reform of car insurance, 23 car owners expressed similar expectations.
Bai Kuiyao, deputy general manager of Changan Insurance's auto insurance department, told reporters that consumer price comparison is a common behavior. If insurers have weak pricing power, they may quote higher prices to premium car owners and cause customer loss, or they may insure riskier customers with lower premiums. Therefore, improving the ability to accurately price is a crucial task for insurance companies to improve their auto insurance operations.
Fifteen of the 30 car owners who filled out the questionnaire said they would seek quotes and compare prices with different insurance companies or internet platforms before each renewal. Another 15 owners said they would not compare prices, and 15 of them said they "where they used to be insured, now where they renewed". At the same time, 9 car owners said that when renewing the insurance, they will generally compare the previous year's premium, and will also consider the impact of insurance on premiums, and 27 car owners said that they will drive more carefully considering that the premium will rise after the insurance is insured. Jiang Lingyun believes that this reflects the guiding role of insurance on safe driving, and the current car insurance pricing method also better reflects the price concessions for high-quality car owners.
In addition to paying attention to the price, many car owners are also very concerned about the services of insurance companies, among which car insurance services and claims are the most concerned. In a community within Beijing's second ring road, car owner Yang Tingfang told reporters that car insurance services have been better than before in recent years. For example, if your car was scratched but you can't find a third party in the past, the insurance company said that it can't pay, and the comprehensive reform of car insurance deleted the deductible agreement such as the inability to find a third-party deductible, and there is no longer any trouble in this regard. At the same time, insurance companies are making claims faster than before. However, according to the latest consumer complaints in the insurance industry released by the State Financial Regulatory Administration, 3603,31 auto insurance disputes received and forwarded by regulatory authorities in the first quarter, accounting for 6.<>% of the total complaints from property insurance companies. Overall, there are still many car insurance disputes.
Industry insiders told reporters that car insurance disputes are mainly concentrated in the service and claims process, and insurance companies still need to further improve the service quality and convenience of claims, as well as the ability to communicate with car insurance consumers.
From the perspective of understanding the service, some consumers are not very clear about the service boundary of insurance companies, and think that insurance companies giving spray paint coupons, car wash coupons, etc. are also an insurance service. After the comprehensive reform of car insurance, the services provided by insurance companies are written in the contract, such as Yang Tingfang's car insurance contract, which specifies two services, one is vehicle safety testing, and the other is road assistance services. According to Article 116 of the Insurance Law, giving or promising to give insurance premium rebates or other benefits other than those stipulated in the insurance contract of the applicant, the insured or the beneficiary is a prohibited act. However, under the influence of many factors, in practice, both insurance companies and consumers have "seen no surprise".
In response to the question on the questionnaire, "Did you know that it is not allowed for insurance companies to give shopping cards, car wash coupons, etc. to consumers when applying for insurance?" 30 out of 11 car owners said they "don't know" and 14 said they "know, but insurance companies generally give gifts, and consumers are happy to accept them."
At the same time, the reporter's investigation shows that regardless of whether there is a gift or not, consumers are most concerned about the final payment cost, and if the price has a comparative advantage, even if there is no gift gift, they are happy to accept it.
Industry insiders believe that promoting the healthy development of the auto insurance market is a continuous process, requiring the joint efforts of regulators, industry associations, insurance companies and other subjects, as well as continuous consumer education.