At a time when the loss of auto insurance business has become a factor restricting the development of the property insurance industry, the market-oriented reform of commercial auto insurance rates will soon be unveiled. After the launch of the plan, the profit margin of auto insurance may be further narrowed. For the previously proposed “additional expense rate according to the 35% standard line”, some insiders believe that the intention of maintaining the overall stability of the market is obvious, but the powerful companies still have various channels to show their advantages. The market-oriented reform of auto insurance rates has not been fully liberalized.
The auto insurance fee reform plan is about to be unveiled. The market-oriented reform of commercial auto insurance rates entering the actual operation stage is welcoming the “closing” node. The China Securities Journal reporter was informed that the rules concerning the floating rate factor and product innovation supervision have entered the final adjustment stage. The reform plan based on vehicle pricing and based on rates and terms will be announced in the near future.
"There is a whole body and the whole body." Many insurance companies made similar evaluations on the upcoming auto insurance fee reform program. The head of the strategic department of a large insurance company told the China Securities Journal that auto insurance has accounted for about 70% of the total amount of property insurance business. Promoting the marketization of auto insurance rates through reform will play an important role in the future development of property insurance. .
The China Securities Journal reporter learned that the auto insurance fee reform plan is to calculate the commercial auto insurance rate into three parts: the benchmark pure risk premium, the benchmark additional fee, and the rate adjustment factor, and clearly stipulates the autonomy of the auto insurance company. Popularization and standardization encourage the active development of innovative terms for commercial auto insurance. Previously, in terms of rates, the China Insurance Regulatory Commission (CIRC) took the lead in organizing the calculation of pure premiums, which was proposed as the basis for commercial auto insurance pricing. The rate floating factor was adjusted on the basis of the original, introducing the vehicle coefficient, channel coefficient, and independent underwriting coefficient, and retaining and optimizing the non-indemnity. The preferential treatment rate and the additional expense rate are based on the 35% standard, and the autonomy of the property insurance company is gradually expanded to determine the autonomy.
It is reported that at the beginning of the reform, the relevant departments will convert the industry-standard pure risk rate table into a form of finding the rate according to the specific model according to the principle of the overall change of the premium level, and unify the industry model database, and then gradually promote the model benchmark. The risk rate schedule is close to the actual level of risk for each model.
At present, the loss of auto insurance business has become a factor restricting the development of the property insurance industry. Originally, insurance companies competed for market resources and shares through adjustments in fees and other links. There was a sign of vicious competition between large companies with first-mover advantage and small and medium-sized companies. After the introduction of the reform plan, it will provide opportunities for companies with auto insurance business to develop markets and standardize services.
Polarization or aggravation of the expected impact of auto insurance reform, many insurance companies believe that the impact of various aspects will make a significant change in the industry structure.
A person in the auto insurance business department of an insurance company told the China Securities Journal that after the introduction of the plan, the profit margin of auto insurance may further narrow. The model clause as a whole expands the scope of the insurance company's responsibility, which may lead to an increase in the cost of compensation; from the perspective of the rate, the new rate plan has a large floating range and the overall premium adequacy may decline. At the same time, independent pricing will gradually become the main variable of auto insurance operation and competition. Under the new pricing system, after the homogenization of auto insurance products and the unification of tariff rates, the industry competition model needs to be changed, which challenges the pricing power of insurance companies.
The auto insurance industry may be in a situation of increased polarization. Large insurance companies can continue to promote business and operational efficiency growth through existing resources and channels, while small and medium-sized insurance companies may face severe development. "This requires insurance companies to upgrade the level of competition, change the existing low-level competition, and while the powerful companies rely on independent pricing to amplify their advantages, the refined management capabilities of auto insurance will become the focus of each company's core competitiveness." People said.
Some industry analysts believe that the impact of auto insurance fees on the industry in the short term may not be obvious. Following the two public release of the “Zero Ratio” report of domestic automobiles, more “zero-to-zero ratio” data is being calculated. The ratio of the price of all the spare parts of the vehicle to the sales price of the vehicle will become the auto insurance premium. The factors of cooperation.
The second generation reform is another factor. Relevant persons of China Life Insurance said that under the framework of the second generation, the risk measurement of auto insurance business returned to normal, which will catalyze the competition in the auto insurance market: “The minimum capital requirement for auto insurance business is lower than other insurance types, and lower than the current solvency requirement. At the same time, according to the second On behalf of the over-regressive design of the minimum capital of premium risk, large entities will have the incentive to continue to maintain and expand the scale of their auto insurance business."
Controversy surcharge rate line 35%
“In the type of automobile insurance structure based on motor vehicles, after the rain and snow weather, especially after the first snow in winter, the vehicle loss ratio immediately increased significantly, while the premium and reserve extraction were evenly distributed in each month of the year. In the short term, the increase in the amount of accidents will cause the measurement factors to fluctuate, especially in November and December. The aforementioned auto insurance business person told the China Securities Journal.
“The unresolved claims of auto insurance are often treated with the expected loss ratio, or the traffic triangle is used for information measurement. This will lead to path dependence and periodic fluctuations, and there is no special way to smooth it because it is affected by the weather. It is very big, and it has a relationship with the risk itself and the market characteristics. After the fee reform plan is further clarified, the insurance company will pay more attention in the measurement."
In the process of soliciting opinions, the insurance industry insiders have disputes about the “additional expense rate must not be less than 35%”. Some large insurance companies believe that the rate of the rate required by the China Insurance Regulatory Commission to be reported by each company shall not be lower than the lower limit of 35%. The rate of 35% is in principle due to careful consideration of the agreed minimum rate of fees, in order not to There have been excessive fluctuations, and the intention to maintain overall market stability and prevent vicious competition is obvious. However, because mature insurance companies have economies of scale and stock customers, the operating costs will be lower than the new insurance companies in the market, resulting in an unfair market.
According to industry experts, the 35% line is actually “meaningless”: “The market price is the result of trading choices, and the risks are not shared. There are various channels for powerful companies to show their advantages. From consumers From the point of view, if the surcharge rate is set too high, it may not be supported in public opinion. The market-oriented reform of auto insurance rates is cautious, but the rate is not fully liberalized."
According to the above-mentioned innovative business unit, “From a business perspective, the price of auto insurance is still very extensive. The insurance company ultimately earns about one-third of the money from high-quality customers to subsidize the loss gap caused by other customers. After that, for different types of customer segments, there will be significant price changes."

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