Rectify abnormally high commissions, bundling sales, and eliminate products with low payout ratios——

  Accidental injury insurance enters the era of strict supervision

  Our reporter Yu Yong and Li Chenyang

  After six months of soliciting opinions, the China Banking and Insurance Regulatory Commission recently issued the "Measures for the Supervision of Accidental Injury Insurance Business." Product actuarial calculations, terms and rates, sales management, information disclosure, etc., aim to further improve the market-oriented formation mechanism of accident insurance rates, standardize the accident insurance market order, and promote the long-term healthy development of the accident insurance market.

  Negative list refers to business chaos

  Accidental injury insurance is a personal insurance in which the insured suffers death or disability due to accidental injury or other accidents agreed in the insurance contract as the conditions for the payment of insurance money.

This type of insurance salesperson often talks about the phrase "you don't know which one will come first tomorrow or the accident."

Because of this, accident insurance is called "the insurance that everyone can afford."

  There is no need for health notification, no waiting period, and the insured amount can reach up to one million yuan...The characteristics of low threshold, low premium, high frequency, and high amount of insurance make accident insurance a product variety that property insurance companies and life insurance companies are competing for.

Take a 30-year-old adult as an example, it only costs more than 200 yuan to buy a one-year accident insurance. Even if it is a high-profile version with a higher insurance coverage and a more comprehensive coverage, the premium does not exceed 400 yuan.

The short-term accident insurance premiums involving tourism and public transportation are only tens or even tens of yuan, which can be said to be the "cabbage price".

  In recent years, accident insurance premiums have grown rapidly, with the annual growth rate of accident insurance premiums exceeding 18% from 2016 to 2018.

In the context of the continuous pressure on the original premium income, the accident insurance premiums in the first five months of this year still grew by more than 7%.

However, with the booming development, the accident insurance market is also plagued by various chaos.

For example, it is bundled with loans, Internet platforms rely on channel advantages to charge abnormally high handling fees for air travel insurance, and individual insurance companies use accident insurance to seek improper benefits.

  In response, the new regulations clarify the "negative list" for accident insurance operation and management, and strengthen supervisory accountability.

Regarding the irregularities in the sales and operation of the comprehensive accident insurance market, nine types of prohibited sexual behaviors are listed, including forced tying and bundling.

"In response to the abnormally high commissions of some accident insurance in the past, insurance companies are required to report the upper limit of the commission rate. For companies whose actual commission rate exceeds the reported commission rate, they shall be held accountable in accordance with the law and guide insurance companies to pay commission fees reasonably. , Lower product prices, and better benefit consumers.” The relevant person in charge of the China Banking and Insurance Regulatory Commission told reporters.

  It is reported that the new regulations emphasize that the predetermined surcharge rate for each policy year is set independently by the insurance company, but the average surcharge rate shall not exceed the prescribed upper limit.

Taking personal business as an example, the upper limit of the average surcharge rate of short-term accident insurance shall not exceed 35%; in long-term accident insurance, the regular delivery product shall not exceed 35%, and the batch product shall not exceed 18%.

  Wang Xiangnan, deputy director of the Insurance and Economic Development Research Center of the Chinese Academy of Social Sciences, said in an interview with a reporter from the Economic Daily that accident insurance has a strong scene and the Internet platform can reach a large number of customers.

Therefore, it has a strong position in the cost negotiation with insurance institutions, making the handling fee higher than common sense and international standards.

The new regulations guide the reduction of accident insurance commission fees, which will promote a more standardized accident insurance market order.

  Scientific pricing promotes product innovation

  Not only that, the new regulations further protect the rights and interests of consumers by improving the actuarial system, establishing a pricing retrospective and adjustment mechanism, and standardizing rate fluctuations.

Among them, clarify relevant requirements for accident insurance business-related reporting liability reserves, product pricing, and cash value calculations, and adopt more prudent methods for the provision of business-related reporting liability reserves for special insurance such as aviation accident insurance.

  “It is necessary to establish a rate adjustment mechanism linked to the compensation situation.” The relevant person in charge of the China Banking and Insurance Regulatory Commission stated that, drawing on the experience of accident insurance supervision in the developed insurance market, setting the minimum loss rate requirement, the insurance premium income for three consecutive years exceeded 5 million yuan and the average For short-term accident insurance products with a loss ratio of less than 50%, insurance companies are required to adjust their premium rates in a timely manner to promote changes in their business models.

  In fact, linking product rates with loss ratios and other indicators and phasing out products with too low loss ratios and obviously unreasonable pricing can encourage accident insurance prices to fully reflect historical data, industry experience, and market supply and demand.

“Many accident insurance products, such as traffic accident insurance and travel accident insurance, have high handling fees and low loss ratios. The low loss ratio indicates that the proportion of premiums paid by customers that is converted into consumer value is low, so the product pricing is unreasonable.” Wang Xiangnan said.

  On September 23, the China Association of Actuaries, the Insurance Industry Association of China, and China Banking and Insurance Information Technology Management Co., Ltd. jointly issued the "Table of Accidental Injury Experience in China's Insurance Industry (2021)."

As the "anchor" of products designed by various insurance companies, the 2021 version of the accident table includes general accident insurance (compiled up to the age of 105, and the elderly section can provide a reference for the elderly's exclusive accident insurance) and special accident insurance such as school insurance. Therefore, the incidence rate table and the accidental disability coefficient table, as well as the occupational grade risk coefficient reference table, more accurately reflect the accident insurance market experience.

  The relevant person in charge of the China Association of Actuaries stated that the preparation of the accident table can effectively promote market entities to scientifically determine the actual rate of the market based on industry experience, market conditions and their own historical data; it can effectively promote market-oriented and demand-oriented The formation of a new product innovation mechanism; it can effectively promote product innovation and supply for different occupations, regions and scenes and other market segments, and effectively promote the high-quality and high-level development of the accident insurance market.

  The reporter learned during the interview that in order to ensure the quality of the preparation of the accident table, the project team invested a lot of time and energy in the data preparation and acceptance stage, and successively sorted out more than 100 fields of 712 products of 56 insurance companies, and revised them cumulatively. More than 560 questions.

Through the combination of system cleaning and manual re-recording, more than 500,000 claims data were cleaned up, which lasted nearly 9 months, and finally completed the calculation data preparation and acceptance work including 5.33 billion pieces of underwriting data and 7.455 million pieces of claim data.

  In addition, the new regulations also require insurance companies to review product pricing every year, and for products whose actuarial assumptions deviate too much from the actual situation, explain the reasons for the deviations and propose corrective measures.

At the same time, insurance companies are required to clarify the upper and lower limits of accident insurance rate fluctuations and the basis for fluctuations, and strengthen the quantitative analysis of risks, so as to achieve effective matching of insurance premium rates with the risks of the insured, and prevent infringement of the legitimate rights and interests of consumers.

  Strict supervision to promote healthy development

  Many industry insiders told the Economic Daily reporter that with the release of the 2021 accident table and the implementation of the new regulations, the development and pricing of accident insurance products will become more standardized and transparent, which will play an important role in creating a standardized and orderly market environment.

  According to the relevant person in charge of the Association of Actuaries, the accident table and risk management report provide a rich and diverse information reference, not only distinguishing application scenarios, age, gender and occupation, but also for accident medical treatment, rural small accidents, borrower accidents and other products. , As well as underwriting, claims, mortality, disability rate and other dimensions have conducted a more in-depth analysis, providing a more detailed data basis for accident insurance product innovation.

  For insurance companies, the occurrence rate reference provided by the accident table can be based on factors such as industry experience, own historical data, market conditions and other factors to scientifically determine the rate, improve the price formation mechanism, and provide consumers with more high-quality and better-priced insurance products. Enhance the sense of acquisition by insurance consumers.

In particular, the incidence of accidental death (disability) of different ages (ranges) and genders can provide strong support for differentiated and refined pricing.

In the future, consumers will have a richer selection of accident insurance products.

  It is worth noting that the new regulations have also strengthened information disclosure.

For accident insurance products with annual premium income exceeding 5 million yuan, insurance companies are required to disclose relevant information such as premium income, compensation amount, and comprehensive compensation ratio according to the product, and increase external supervision of accident insurance operations.

In accordance with the principles of individual insurance first, group insurance, and pilot and comprehensive disclosure in stages, the Company will promote the disclosure of accident insurance business data, cooperative institutions, loss ratios, and typical cases step by step, gradually expand the scope of insurance types, and refine the data dimensions.

  At the same time, it is clarified that personal accident insurance operations will be first disclosed in 2023, and the pilot insurance business data of aviation accident insurance, borrower accident insurance, travel accident insurance, and transportation accident insurance will be disclosed by product; all annual premiums will be disclosed by product in 2024 Operating data of personal accident insurance products with revenues of more than 5 million yuan and group accident insurance operations.

  "The staged public disclosure of operating information such as accident insurance compensation rates, and the implementation of the commission rate filing system will help promote reasonable payment of commission fees by insurance companies, and enable consumers to better understand the actual operating conditions of accident insurance business and make accurate judgments. Whether the product pricing is reasonable or not, further standardize the operating behavior of insurance companies." Industry insiders analyzed.

  Wang Xiangnan believes that with the implementation of the new regulations, it is expected that the total cost of accident insurance will drop, some market competition costs will be transferred to other forms of costs, product prices will drop, and the loss ratio will rise.

Of course, Internet channels and the business of some large part-time agents will be affected to a certain extent. The market share of large companies will likely rise, and the welfare and sense of gain of consumers will be significantly improved.

  In addition, the reporter learned that the Association of Actuaries is studying and forming a series of accident insurance data collection standards, gradually improving the standardization level of basic data and the level of data quality management, which will help establish an industry-wide dynamic retrospective and normalized monitoring mechanism for accident insurance.

This will have a more profound impact on the healthy development of the industry.