"The highest commission rate has reached more than 30%, and the competition for customers is fierce, and the rebate is getting higher and higher … …” Business personnel of a large property insurance company revealed that the phenomenon of "vicious competition of commercial auto insurance fees" has risen.
In view of the problem of high fee competition in some regions and institutions, the State Financial Supervision and Administration recently issued the Notice on Regulating the Order of the Auto Insurance Market, which started to regulate the order of the auto insurance market from five aspects.
Cash back for maintenance
Auto insurance "rebate" is strong
Over the years, the regulatory authorities have repeatedly applied to rectify the chaos, requiring insurance companies not to engage in unfair competition. Property insurance companies and insurance intermediaries are not allowed to give or promise to give benefits to the insured and the insured other than those stipulated in the insurance contract by returning or giving cash, prepaid cards, securities, insurance products, shopping vouchers, physical objects and points deduction. It is not allowed to illegally pay benefits other than those stipulated in the insurance contract in disguised form by participating in promotional activities organized by other institutions or individuals.
Since September 2020, after the comprehensive reform of auto insurance, the auto insurance market has shown a situation of "double decline" in premium price and handling fee rate. However, the phenomenon of "vicious competition in handling fees" in the auto insurance market has risen again this year.
Many car owners told Beijing Youth Daily that the "rebate" phenomenon of commercial auto insurance still exists, and the intensity of "rebate" has not diminished. On some social media, there are also insurance company salesmen who issue "rebate" promotions to attract customers.
In an interview, Mr. Liu reported that the price of commercial auto insurance has been really cheap in recent years, and it has not been out of danger for six consecutive years. Counting the returned cash of more than 2,000 yuan, it is several hundred cheaper than last year.
Ms. Zhang’s private car insurance is about to expire. This month, she has received many phone calls from insurance salesmen, all of whom have given more concessions than the contract quotation. Calculated, the commercial insurance, compulsory insurance and vehicle and vessel use tax totaled 3,791 yuan, which can be returned to 760 yuan after placing an order through the APP. Even a salesman asked someone to give her an account and return it to 100 yuan, and then send it for a maintenance, a paint repair and six car washes. Ms. Zhang said: "I will definitely shop around and see which one offers the best price."
Vicious competition for handling fees has risen
In the long run, it may affect the interests of consumers.
"Now we are faced with a dilemma. The big insurance companies in the head have high profits and sufficient expenses. If they take the lead to grab market share, small and medium-sized insurance companies will lose the market if they don’t follow, and they may not be profitable if they follow." A car insurance business person told the reporter of Beiqing Daily that the handling fee rate for compulsory insurance is around 4% and that for commercial insurance is around 15%. In order to grab territory and share, some property insurance companies have given a handling fee rate of over 30% through unfair competition, which has greatly deviated from the reasonable range of auto insurance handling fee rate.
These undisclosed fees allow competition, mainly divided into open lines and dark lines. The so-called "open-line" profit-making means that auto insurance sales personnel return part of the commission from sales to customers in order to obtain customers, which is mainly a personal act; The "hidden line" is that insurance companies pay fees to 4S stores, intermediaries and other channels, which are regulated by insurance companies.
In fact, this vicious competition for handling fees has not actually fully benefited auto insurance consumers, but has provided opportunities for arbitrage between different channels in the auto insurance market. If the handling fee rate of the intermediary company is higher than other channels, other channels will hang suitable customers in the intermediary company to earn higher handling fees from the insurance company, and finally the two sides can share the difference between the handling fees. In the long run, the vicious competition in the auto insurance market will inevitably affect the interests of consumers.
Supervision and rectification of chaos
It is required to strengthen the management and control of handling fee accounting.
Why do insurance companies still have to seize the market through "rebate" in the case of repeated applications from the regulatory authorities? How can auto insurance companies compete normally?
Xu Jianping, vice president of Cheche Technology, said that "exchanging fees for market share" has always been a chronic disease in the property insurance industry.
Once large insurance institutions take the lead in grabbing market share under the pressure of performance, other market players will certainly follow suit and quickly lead the market fee competition to heat up, which is likely to return to the eve of comprehensive reform of auto insurance. This vicious competition in handling fees will not only benefit consumers, but also the insurance companies themselves will suffer great losses.
From the insurance company’s point of view, the fee competition behavior in the auto insurance market is mainly rooted in the mechanism assessment of the head office. Excessive business growth indicators lead to grassroots buying business at no cost, which directly leads to vicious competition chaos such as charging fees and grabbing orders. It is suggested that insurance companies should standardize their assessment standards and set reasonable business objectives.
The vicious competition of handling fees in the auto insurance market has attracted the attention of the regulatory authorities. Recently, the Property Insurance Department of the State Financial Supervision and Administration Bureau issued the Notice on Regulating the Order of the Auto Insurance Market to guide insurance companies to operate in compliance and prudence.
The Notice regulates the order of the auto insurance market from five aspects, including prohibiting insurance companies from blindly fighting for scale and share, and assigning unrealistic premium growth tasks to branches. At the same time, it also requires insurance companies not to deviate from the actuarial pricing basis and sell auto insurance products at a price lower than the cost. Insurance companies are required to strictly control internal control such as expense budget, examination and approval, accounting and auditing, and truthfully allocate various operating and management expenses, and strengthen the management and control of handling fee accounting. Text/Reporter Yan Lishuang Coordinator/Yu Meiying
memory
The regulatory authorities started to regulate the order of the auto insurance market in five aspects.
The Property & Casualty Department of the State Financial Supervision and Administration Bureau issued the Notice on Regulating the Order of the Auto Insurance Market, and started to regulate the order of the auto insurance market from five aspects.
1. Firmly establish the concept of compliance management and strictly implement various regulatory requirements.
2. Further strengthen the sense of responsibility and overall situation, and consciously assume the main responsibility of maintaining the order of the auto insurance market.
3. All property insurance companies should attach great importance to the insurance underwriting services for high-risk vehicles such as motorcycles and operating vehicles.
4. All banking insurance regulatory bureaus shall continue to monitor the dynamic situation of the auto insurance market, pay special attention to the expense levels of institutions within their jurisdiction, and strengthen the supervision of the implementation of auto insurance rates.
5. All banking and insurance regulatory bureaus should continue to maintain the high-pressure situation of auto insurance supervision, fight early and fight small, and prevent the behavior of individual institutions from affecting the stability of the auto insurance market in the whole jurisdiction.
