Seven major changes in the comprehensive reform plan for auto insurance are related to citizens

  Pay strong insurance up to 200,000

  The China Insurance Regulatory Commission recently issued the "Guiding Opinions on the Implementation of Comprehensive Reform of Auto Insurance (Draft for Comment)" (hereinafter referred to as the "Draft for Comment"), which officially launched the comprehensive reform of auto insurance. How to change? According to the China Insurance Regulatory Commission, for consumers, under the circumstances of expanding insurance liability and increasing the amount of protection, premium expenditure will also be significantly reduced; but for property and casualty companies, industrial underwriting losses may occur within a certain period of time after the reform, while The market players will intensify their differentiation, and small and medium-sized property insurance companies may experience operational difficulties.

  According to data from the China Banking and Insurance Regulatory Commission, the original premium income of auto insurance reached 818.8 billion yuan in 2019, accounting for more than 60% of the industry's total premium income. It is still the main type of insurance in the property and casualty industry.

  Text/Guangzhou Daily Full Media Reporter Liu Ranran

  The core of reform:

  Consumer premiums will fall significantly

  The China Insurance Regulatory Commission disclosed that giving full play to the decisive role of the market in the allocation of auto insurance resources is the focus of this reform, and many of the new adjustments are also around this goal. For example, the Draft for Consultation provides specific criteria for the range of rate adjustment coefficients directly related to premiums. It is mentioned that combining the "independent channel coefficient" and the "independent underwriting coefficient" into one and integrating them into the "independent pricing coefficient" is a key step in the reform.

  In order to prevent the market from ups and downs and disorderly competition, the regulatory authorities decided to implement this reform in two steps. In the first step, the range of the independent pricing coefficient was determined to be 0.65 to 1.35, and in the second step, it was completely liberalized in due course based on the progress of the reform. At the same time, at the beginning of the comprehensive reform, stricter restrictions will be imposed on the upper limit of the "independent pricing coefficient" for new vehicles.

  In response, the head of the relevant department of the China Banking and Insurance Regulatory Commission said: "After the reform, the benchmark premium price of commercial auto insurance will drop significantly, and the actual premiums signed by consumers are also expected to decline significantly."

  China Banking Regulatory Commission responded:

  Consumers, insurance agencies, regulatory authorities all benefit

  The China Insurance Regulatory Commission predicts that this comprehensive auto insurance reform will have an impact on all aspects of the market: for consumers, with the expansion of insurance liability and the increase in the amount of insurance, premium expenditure will also be significantly reduced, and will undoubtedly benefit from the reform.

  For property and casualty insurance companies, although the scale of premiums has declined, the increase in insurance coverage, the increase in insurance coverage, the growth of new cars and the increase in grades will also be hedged; as auto insurance prices return to a reasonable level, various illegal and illegal means are used to extract fees The phenomenon will be significantly reduced, which can reduce the risk of leakage and tax expenditure, reduce the risk of compliance, and improve the image of the industry.

  For intermediary channels, the reform is conducive to obtaining legal and reasonable intermediary income, standardizing financial business management, and reducing the risk of illegal or illegal activities.

  For supervision, the comprehensive and smooth implementation of the reform will help solve the long-term violations of laws and regulations in the auto insurance market, and promote the optimization of the allocation of regulatory resources.

  A few consumers are more expensive to insure

  Operational difficulties of small and medium property insurance companies

  What new situations may appear in this comprehensive reform of auto insurance? How to view these changes and even challenges? The China Insurance Regulatory Commission responded that it may face four new situations after the reform.

  The first is that the scale of premiums may decline. This reform not only recalculated the benchmark pure-risk premium based on actual risk, but also lowered the predetermined premium rate to 25%. After the reform, the benchmark premium price of commercial auto insurance will drop significantly. It is expected that the actual premium signed by consumers will also drop significantly. The overall scale of auto insurance premiums in the industry may decline to a certain extent.

  Secondly, within a certain period of time after the reform, there may be industrial underwriting losses. Due to the greater intensity of this reform and more decentralization of simplified government, if the market players are not rational enough and the supporting regulatory measures cannot keep up, it is possible for the market to appear "chaotic at a glance" in the short term, leading to industrial underwriting losses. It even affects the quality of claims service. The "Guiding Opinions" take into account relevant supporting measures. If measures such as promoting the rational management of market entities and regulating market order are in place, the risk of industrial underwriting losses should be effectively prevented.

  The third is that after the reform, small and medium-sized property and casualty insurance companies may experience operational difficulties. With the advancement of market-oriented competition, the phenomenon of "strong and constant" in many industries is becoming increasingly obvious. The same is true of the property and casualty market. Small and medium-sized companies are generally at a disadvantage and their operations are generally more difficult. It is expected that after the reform, market players will intensify their differentiation, and it will be more difficult for some small and medium-sized companies with weak competitiveness to operate. However, this is a normal phenomenon of survival of the fittest under the market mechanism, which is also conducive to forcing their professional transformation. At the same time, the "Guiding Opinions" put forward corresponding supporting policies. These include supporting small and medium-sized property and casualty insurance companies to give priority to the development of differentiated, specialized, and unique innovative products, giving more relaxed additional expense rates and other regulatory policies, and appropriately reducing the solvency regulatory requirements.

  Finally, this reform recalculated the benchmark pure risk premium based on the actual risk situation, and there may be a small number of consumers who will experience an increase in the price of signed premiums.

  Seven changes

  1. Raise the limit of strong traffic insurance to 200,000

  Raise the total liability limit of the strong traffic insurance from 122,000 yuan to 200,000 yuan, including the death and disability compensation limit from 110,000 yuan to 180,000 yuan, the medical expense compensation limit from 10,000 yuan to 18,000 yuan, and the property damage compensation limit is maintained 0.2 million yuan remains unchanged.

  The non-liability compensation limit is adjusted according to the same proportion, in which the death and disability compensation limit is increased from 11,000 to 18,000 yuan, the medical expense compensation limit is increased from 1,000 yuan to 1,800 yuan, and the property damage compensation limit remains unchanged at 100 yuan.

  2. Three liability insurance up to 10 million

  Increase the liability limit of commercial three liability insurance from 50,000 to 5 million yuan to 100,000 to 10 million yuan. This improvement is mainly considering the level of economic and social development to meet the higher risk protection needs.

  3. 7 items including broken glass are included in insurance liability

  The auto insurance main insurance clause adds seven aspects of insurance liability, which are motor vehicle theft, separate glass breakage, spontaneous combustion, engine wading, excluding deductible rate, designated repair shop, unable to find third-party special agreement, and support The industry develops additional insurance products such as wheel individual loss insurance and medical insurance external use liability insurance.

  A reporter interviewed people in the insurance industry and was informed that the seven insurance liabilities added to the main insurance of auto damage insurance belonged to seven additional insurances in the past. Consumers can only obtain corresponding protection by insuring the corresponding additional insurance. The "Guiding Opinions" put additional insurance in the auto damage insurance clauses, which greatly improves the coverage of auto damage insurance, especially when the engine is wading and the glass is broken separately. It will be easier to deal with in the future.

  4. Formulate insurance value-added service insurance clauses on behalf of driving

  The "Draft for Comments" has multiple clauses to support the industry to expand the scope of commercial vehicle insurance coverage under the principle of basically not increasing consumer premiums. For example, to guide the industry to reasonably delete the exemption clauses that are likely to cause claims disputes in practice, to reasonably delete exemption agreements such as accident liability exemption rates, and failure to find third-party exemption rates.

  Formulate new energy vehicle insurance, driver accident insurance, motor vehicle extended warranty insurance model clauses, explore the development of innovative products such as motor vehicle mileage insurance (UBI) in new energy vehicles and qualified traditional vehicles, and formulate inspections, roads Exemplary terms for car insurance value-added service insurance such as rescue, driving agency services, and safety testing.

  5. Consumers who do not incur more preferential treatment

  On the basis of increasing the liability limit of the strong traffic insurance, combined with the comprehensive compensation rate level of the strong traffic insurance of various regions, a regional floating factor was introduced into the road traffic accident rate adjustment coefficient. The upper limit of the floating rate remained unchanged at 30%, and the lowering of the floating rate from the original minimum -30 % Expanded to -50% to increase the rate of preferential treatment for consumers who have not paid compensation. This also means that the rate discount for consumers who have not paid compensation has increased compared to the original, which is a good thing for car owners with better driving behavior.

  6. Lowering the upper limit of handling fee ratio

  The upper limit of the surcharge rate for commercial vehicle insurance products was lowered from 35% to 25%, and the expected loss ratio was increased from 65% to 75%. Support property and casualty insurance companies to report and approve commercial auto insurance products with an upper limit of additional expense ratio of less than 25% in online sales, e-marketing and other channels in a timely manner.

  According to the actual market risk, recalculate the pure risk premium of the commercial auto insurance industry, and establish a normalization mechanism for the pure risk premium calculation of the commercial auto insurance industry that is adjusted every 2 to 3 years.

  When guiding the industry to formulate a non-compensation preferential factor for commercial auto insurance, it will consider expanding the scope of the compensation record from the previous year to the previous three years, and reduce the rate of increase in the rate of accidental compensation to consumers.

  Guide the industry to rationally set the upper limit of the handling fee ratio based on the upper limit of the additional cost rate of commercial vehicle insurance products, the actual market operation and the differences between market entities, and reduce the excessively high handling fee level in some areas.

  7. Promote the real-name system of auto insurance and promote electronic insurance policies

  On the basis of protecting consumers' right to know and choice, property insurance companies are encouraged to provide consumers with more convenient auto insurance underwriting and settlement services through electronic insurance policies.

  Property and casualty insurance companies should strengthen the identity verification of policyholders, do a good job in policy signatures, interpretation of terms, and exemption statements, promote real-name payment, promote information transparency, prevent misleading sales, advance insurance premiums, and sign signatures, etc., to safeguard the legitimate rights and interests of consumers.

  Strengthen research on new technologies and new applications such as Internet of Vehicles, new energy, and autonomous driving, improve the efficiency of auto insurance operations, consolidate the auto insurance service foundation, optimize the auto insurance development environment, and promote the development of auto insurance innovation.

  Case analysis

  For example, the basic premium for compulsory insurance for cars under 6 seats is 950 yuan. Currently, the industry stipulates a maximum discount of 30%. After the reform, the maximum or 50% discount can reduce expenditure by 190 yuan.

  Liu Ranran