Original title: Internet property insurance will welcome new regulations and shall not pay abnormally high handling fees to online platforms in disguise
Internet property and casualty insurance is about to usher in new regulations. “Securities Daily” reporters learned from industry insiders that the China Banking and Insurance Regulatory Commission recently issued the “Notice on Strengthening and Improving the Supervision of Internet Property Insurance Business (Consultation Draft)” (hereinafter referred to as “Consultation Draft”) to various property insurance companies. , Clarified the six major entry thresholds, and clarified the operating practices of insurance companies in the development of Internet property insurance business, and the behavior control of insurance intermediaries.
According to industry insiders, according to the “Draft for Comments”, the entry threshold for insurance companies to engage in Internet property insurance operations is not high, and most insurance companies have the opportunity to participate. However, with the tightening of regulatory requirements, from the perspective of development speed, the growth of Internet property insurance premiums may slow down in the short term.
Barriers to entry are not high
Most insurance companies have the opportunity
According to the “Draft for Solicitation of Comments,” insurance companies should meet the six requirements for conducting Internet property insurance business. Among them, the quantitative requirements are reflected in the comprehensive rating of solvency and risk. On the whole, the barriers to entry are not high, which means that most property and casualty insurance companies can get involved in Internet property and casualty insurance operations.
Specifically, insurers must have a comprehensive solvency adequacy ratio of no less than 120% for four consecutive quarters, and a core solvency adequacy ratio of no less than 75%; at the same time, the comprehensive risk assessment for four consecutive quarters is B and above. According to the latest data disclosed by the my country Banking and Insurance Regulatory Commission, as of the end of the second quarter of this year, the average comprehensive solvency adequacy ratio of Chinese insurance companies was 243.7%, and the average core solvency adequacy ratio was 231%. The comprehensive risk rating of 95 insurance companies was rated A, 76 insurance companies were rated B, 5 insurance companies were rated C, and 2 insurance companies were rated D.
At the same time, insurers must meet two requirements for conducting Internet property insurance business: they have not received major administrative penalties for Internet insurance business within one year; and there is no serious infringement of the rights and interests of insurance consumers in operating Internet property insurance business within one year.
In summary, the vast majority of property insurance companies meet the entry threshold requirements for Internet property insurance, and they may not have branches to carry out Internet property insurance business in the country other than auto insurance and agricultural insurance. The industry believes that this is good for small and medium-sized property insurance companies with fewer outlets.
In recent years, the development of my country’s Internet insurance business has entered the fast lane. Statistics show that from 2011 to 2020, total Internet insurance premiums will achieve a compound growth rate of 65%. CICC (59.070, -0.98, -1.63%) previously issued a research report stating that as younger generations with online consumption habits become the main force of insurance consumption, Internet insurance will achieve a compound growth rate of 24% from 2021 to 2030.
In order to regulate the development of Internet insurance, the China Banking and Insurance Regulatory Commission issued the “Internet Insurance Business Supervision Measures” at the end of last year, emphasizing the principles of licensed operation and standardized marketing. Enterprises have implemented ten aspects of the entry threshold, business area, and business behavior specifications for the Internet property insurance business.
A non-banking analyst at a leading brokerage firm told the Securities Daily reporter that with the tightening of supervision, the development of Internet property insurance may “slow down.” Data show that last year, the cumulative premium income of Internet property insurance was 79.795 billion yuan, a year-on-year decrease of 4.85%, which was nearly 9 percentage points lower than the growth rate of the property insurance market over the same period.
Insurers must be cautious
Choose a compliant network platform
The “Draft for Comment” puts forward specific requirements for insurance companies to choose online platforms and the cooperation model between the two parties. Internet insurance companies should continue to increase the proportion of their self-operated businesses.
According to the “2020 Internet Property Insurance Market Analysis Report” issued by the Insurance Association of China, Internet property insurance business mainly comes from third parties (including third-party online platforms and professional insurance intermediaries). In 2020, in the Internet property insurance business, third-party premiums accounted for 74.34% of the total, an increase of 5.45 percentage points year-on-year; premium income from self-operated online platforms was 18.785 billion yuan, accounting for 23.54%, a year-on-year decrease of 5.68 percentage points.
In this regard, the “Draft for Comments” clarified that insurance companies should carefully select compliant online platform companies, not only to screen insurance intermediaries in which the online platform companies directly or indirectly hold shares, but also to evaluate the online platform companies themselves. Continue to track and pay attention to the compliance and security of network platform companies.
“We should insist on improving operating efficiency and giving profit to insurance consumers, and we should not pay abnormally high handling fees or infringement of insurance to online platform companies in the name of “technical service fees” and “marketing publicity fees” linked to premiums by means of premium sharing, etc. Consumer rights.” The “Draft for Comments” further requires. Non-banking analysts of the aforementioned brokerage firms told the Securities Daily reporter that the regulations are highly targeted. At present, the phenomenon of disguised payment of fees is a common industry problem, and supervision in this field will be further strengthened in the future.
It is worth mentioning that for the Internet financing credit insurance business, the “Draft for Comments” separately stipulates that insurers should not underwrite Internet financing credit insurance businesses where premiums account for a high proportion of the financing obligor’s comprehensive financing costs. At the same time, it also emphasized that insurance companies must not infringe insurance consumers’ right to know and deprive insurance consumers of their right to choose.
(Edit: Wen Jing)