text | Sanzang
On August 12, China Banking and Insurance Regulatory Commission announced the 2021 compulsory motor vehicle traffic insurance business situation:
In 2021, the coverage of compulsory motor vehicle traffic insurance further expanded, and the number of insured motor vehicles reached 323 million, an increase of 7.3% year-on-year. Among them, the number of insured cars was 287 million, an increase of 7.5% year-on-year.
From the perspective of the protection level, the dividends of the comprehensive reform of auto insurance have deeply benefited consumers. The liability limit for compulsory motor vehicle insurance has increased from 122,000 yuan to 200,000 yuan, and the insurance amount will be increased by 21 trillion yuan in 2021, and the insurance amount will be increased by 48.8%.
From the perspective of the reduction and concession rate, the floating plan for compulsory motor vehicle insurance premium rate has reduced the average premium by 1.8%, saving consumers 8.2 billion yuan in premium expenditure.
From the perspective of compensation , the protection role of compulsory motor vehicle insurance has been further exerted. Compulsory motor vehicle insurance has compensated 176.3 billion yuan, an increase of 9 billion yuan over the previous year, the compensation cost increased by 27.4%, and the number of cases filed increased by 20.9%.
From the operating results of compulsory motor vehicle insurance, compulsory motor vehicle insurance premium income is 237.4 billion yuan, and subtracting compulsory motor vehicle insurance compensation expenditure of 176.3 billion yuan and various operating costs of 58.5 billion yuan (including 2.9 billion yuan in relief funds), compulsory motor vehicle insurance suffered an insured loss of 4.4 billion yuan in 2021.
However, by sharing investment income of 8.6 billion yuan, compulsory motor vehicle insurance has not suffered any operating losses in general, and even has a slight surplus. The result of
has once again triggered industry thinking: Will the profit cycle dividend of
will continue? Will the auto insurance strategy of some small and medium-sized insurance companies that individually grasp compulsory motor vehicle insurance business still be the main theme of differentiated competition among the main entities of auto insurance ?
This will further stimulate the entire industry's prediction of when the reform of auto insurance will be further deepened. After all, the China Banking and Insurance Regulatory Commission has stated that it will unswervingly deepen the comprehensive reform of auto insurance, promote the industry to improve the operating efficiency and service quality of compulsory traffic insurance, and work with relevant departments to further optimize the compulsory traffic insurance system and mechanism.
Therefore, how to grasp the development strategy and development rhythm of compulsory traffic insurance is the most important "problem" that every auto insurance company cannot ignore in the process of auto insurance reform and development.
1 5-year underwriting profit vs 11-year underwriting loss: 47.9 billion yuan of operating profits with a cumulative underwriting loss of 32.6 billion
compulsory motor vehicle insurance, as the first compulsory insurance system implemented by national laws in my country, has been implemented on July 1, 2006, and has become the insurance type with the widest participation and the highest attention in the field of property insurance.
This is not only reflected in whether the coverage scope and coverage amount of compulsory motor vehicle insurance can meet the most basic car risk protection needs and third-party compensation guarantees under relatively low prices; it is also reflected in that compulsory motor vehicle insurance, as a compulsory motor vehicle insurance, must follow the principle of no profit or no loss in rate determination, and whether the operating results of compulsory motor vehicle insurance are profitable is the focus of people's livelihood.
From the perspective of the premium income of compulsory motor vehicle insurance for 16 years, from 2006 to 2021, compulsory motor vehicle insurance had a cumulative premium of 215.97 billion yuan, and premium income has steadily increased with the increase in domestic car ownership.
However, in the past 15 and a half years, compulsory motor vehicle insurance only underwriting profits in the past five years from 2008 and 2017 to 2020, and the remaining years have suffered losses, and the cumulative underwriting losses are 32.6 billion yuan.
However, due to the support of investment income, except for the five and a half years of 2006-2007 and 2009-2012, compulsory motor vehicle insurance achieved annual operating profits in the remaining years, and the cumulative operating profits were 47.9 billion (pre-tax).
From this perspective, the profitability of compulsory traffic insurance is quite good. This shows that compulsory motor vehicle insurance has a promoting effect on the overall operating efficiency of property insurance companies.
But it is easy to cause a misunderstanding. Doesn’t compulsory traffic insurance follow the principle of no profit or loss? Why will there still be profits?
In fact, the principle of compulsory motor vehicle insurance is not profitable or loss mainly refers to:
When determining compulsory motor vehicle insurance rates, insurance companies can only consider cost factors and do not set the expected profit margin, that is, the rate composition does not include profits.
That is to say, the principle of is reflected in the rate setting process, rather than simply equivalent to the operating results of an insurance company. In the actual operation process, insurance companies can achieve small profits by strengthening management, reducing costs and using funds, but they may also suffer losses due to excessive compensation costs due to environmental changes.
But in any case, in the past 15 and a half years, compulsory motor vehicle insurance has focused on sharing investment income, and has shown good profitability overall, and has thus become the operating profit regulator of many property insurance companies.
The profitability of compulsory motor vehicle insurance is more manifested as a cyclical nature, that is, the profit cycle and loss cycle often last for a period of time. Then, through adjustments and changes at the industry policy level, compulsory traffic insurance will gradually guide the overall operation to develop in the direction of no profit or loss.
For example, in 2008, after about one and a half years of implementation of compulsory motor vehicle insurance, the industry adjusted the amount and rate of compulsory motor vehicle insurance for the first time due to the social pressure to estimate the profitability of compulsory motor vehicle insurance. After a short-term profit, compulsory motor vehicle insurance began to enter a loss cycle.
As the entire auto insurance industry entered the golden age of profits from 2013, the profitability of compulsory motor vehicle insurance has also continued to improve and reached its profit peak in 2020. Afterwards, with the implementation of the comprehensive reform of auto insurance in September 2020, the coverage amount was once again increased and adjusted.
Therefore, after the first complete operating year after the comprehensive reform of auto insurance, compulsory motor vehicle insurance once again returned to the stage of underwriting losses, and the cyclicality under policy intervention was obvious.
2 Three questions about compulsory traffic insurance operations: Who is seizing compulsory traffic insurance business? What will be the profit results in 2022? Will it drive the deepening of the reform of auto insurance?
From the market perspective, since compulsory motor vehicle insurance has generally been stable in recent years, some property insurance companies have long regarded compulsory motor vehicle insurance as a key insurance type and vigorously developed compulsory motor vehicle insurance business. There are not a few property insurance companies like
.
can be seen from the data from January to July 2022 that there are currently 15 companies with a single-sports business accounting for more than 50%, accounting for almost a quarter of the total number of auto insurance companies, and most of these companies are small and medium-sized companies.
And from the market situation in 2022, it can also be inferred that the profitability of compulsory traffic insurance this year will be very good.
On the one hand, . Due to the impact of the epidemic in the first half of the year, the risk rate of compulsory motor vehicle insurance in January-July 2022 was significantly reduced, and the number of valid reports of compulsory motor vehicle insurance decreased by 6.6% year-on-year.
On the other hand, , the comprehensive cost rate of compulsory motor vehicle insurance in the first half of the year remained basically around 98%, with 2 points of underwriting profit margin.
This shows that companies that have begun to seize compulsory traffic insurance since the second half of 2021 will theoretically achieve a good profit effect this year.
But the problem also follows. Compulsory motor vehicle insurance makes so much profit. Will it accelerate the progress of the auto insurance reform in the entire industry?
In fact, the reform of auto insurance has not stopped, and the reform of compulsory motor vehicle insurance is also fully reflected in the details.
Relevant person in charge of the China Banking and Insurance Regulatory Commission said that 2021 is the first complete operation year after the comprehensive reform of auto insurance, and the insurance industry continues to promote the implementation of people-friendly policies.
First, the insurance protection function is significantly enhanced.With the support of public security traffic management and other departments and all sectors of society, the insurance industry continues to promote the implementation of people-friendly policies.
The second is to effectively improve the quality and efficiency of insurance services. In response to the spread of the epidemic at multiple points, the China Banking and Insurance Regulatory Commission urged the insurance industry to increase its support for the real economy, help freight logistics to ensure smooth flow, establish risk solutions for the entire industrial chain, actively activate insurance extension services for suspended vehicles in areas with severe epidemics, moderately delay the payment time of premiums, and provide convenient service measures during the epidemic in terms of online insurance, online claims settlement, epidemic prevention and management, to help epidemic prevention and control and economic and social development.
Third, the insurance system mechanism is further optimized. In 2021, the China Banking and Insurance Regulatory Commission actively promoted the improvement of the supporting mechanisms for compulsory traffic insurance, and jointly improved the " Road Traffic Accident Social Assistance Fund Management Measures " with the Ministry of Finance and other relevant departments, expanded the scope of rescue targets, included the insured motor vehicle personnel and insured persons as rescue targets, extended the rescue time, expanded the time limit for rescue from 72 hours to 168 hours, set up a hotline to establish a 24-hour duty system, shortened the processing time limit, standardized the online application and review process of the rescue fund, and 82.9 billion yuan of the Road Traffic Accident Social Assistance Fund will be withdrawn in 2021. These actions of
all mean that the regulatory authorities will unswervingly deepen the comprehensive reform of auto insurance, promote the industry to improve the operating efficiency and service quality of compulsory motor vehicle insurance, and will work with relevant departments to further optimize the compulsory motor vehicle insurance system and mechanism to continuously meet consumers' growing insurance protection needs.
3 Can compulsory motor vehicle insurance bring continuous profit value: While making careful predictions, we need to think about the model innovation
In fact, the continuous profitability of compulsory motor vehicle insurance has already weakened. This is determined by compulsory traffic insurance in the long run to follow the periodicity of not making any profit or losing money.
From the data in 2021, it can be seen that compulsory motor vehicle insurance has entered the stage of underwriting loss, which is a signal.
It is worth noting that in 2021, the insurance industry actively participated in the Supreme People's Court unified personal injury compensation standard pilot project for urban and rural residents , continuously improving the efficiency of personal injury claims service, and the amount of personal injury compensation for rural residents in traffic accidents has been greatly increased. This shows that the role of "compensation" in auto insurance will become more and more obvious in the future.
At the same time, under the guidance of the comprehensive reform of auto insurance, the rate floating mechanism of compulsory motor vehicle insurance has also been adjusted simultaneously, and the leverage effect of rewarding the best and punishing the worst is more obvious. In many regions, the maximum discount for policyholders who have not taken any risks for many years can reach 50%.
Therefore, the decline in the insurance rate brought by the epidemic in 2022 will also bring the floating rate discount into the next year's renewal, which may cause a large-scale decline in premium adequacy when renewing the insurance.
Under the influence of this " scissors gap ", accompanied by the pressure of social "attention", the profitability of compulsory traffic insurance is facing severe tests.
companies that mainly rely on compulsory motor vehicle insurance to earn profit effects do need to re-examine the continued profit value of compulsory motor vehicle insurance.
Especially in the second half of 2022, whether it should increase efforts to grab compulsory traffic insurance business needs to be carefully predicted.
Of course, some property insurance companies have begun to give up the competition for compulsory traffic insurance in the red sea:
It is manifested as the growth rate of compulsory traffic insurance in the business is far behind that of commercial auto insurance, and the more typical ones are Yong'an, Mount Tai, and Mount Everest.
also has companies such as Beibu Gulf, Fubon, Haixia, Hyundai, Jianxin . Although they do not want to give up compulsory traffic insurance business, due to the drag of the overall auto insurance business, the negative growth rate of compulsory traffic insurance in 2022 exceeded 20%.
This shows that the market's competitive direction is differentiated. Even mandatory insurance types can bring about different choices of auto insurance strategies and trigger changes in the auto insurance pattern. This is a sign that auto insurance is moving towards marketization.
But it needs to be considered more that the reform direction of compulsory traffic insurance in my country must be consumer-centric. Model innovation is inevitable to further reduce consumers' premium expenditures, and to continue to expand consumers' demand coverage, while avoiding insurance companies falling into losses.
If you learn from the Hong Kong market, you can find that the intervention of leverage is one of the possible paths for the compulsory traffic insurance model to change.
But for the current property insurance industry, how to seize the few cycle dividends left by compulsory motor vehicle insurance and do the most "simple" thing is still the most realistic thing for the industry's development.
