Foreign Capital Kills China's Strong Insurance Market

Although the foreign car insurance that enters China for 20 months is not happy, and faces tempting cakes, no one gives up.

On May 1, 2012, China Compulsory Insurance Market opened up to foreign-funded insurance companies, marking that foreign-funded insurance can fully enter the Chinese auto insurance market. In the early days, foreign car insurance could only sell commercial insurance and was not allowed to sell traffic insurance. There are already nine foreign-funded insurance companies that have obtained China Insurance Regulatory Commission's approval of the compulsory traffic insurance licenses. Among them, seven companies, including American Libao Insurance, Allianz P&C Insurance, and Amway P&C Insurance, have officially sold the TAC insurance policies. While foreign auto insurance entered the Chinese market for 20 months, foreign auto insurance encountered a bottleneck in the business process, but they are all actively exploring the auto insurance market in China and are optimistic about the auto insurance market in China.

Drive the upgrade of auto insurance market services

Before the compulsory insurance market was opened to foreign auto insurance companies, foreign-funded property and casualty insurance companies could only operate commercial auto insurance, and customer's liability insurance and commercial auto insurance had to be insured in two places, which made the insurance inconvenience. This would be a commercial auto insurance business for foreign property insurance companies. The growth has created some obstacles.

Allianz Property Insurance stated: “After operating foreign-funded insurance, foreign companies can clearly see a significant increase in the proportion of auto insurance premiums as a percentage of the company’s overall premium. In addition, through the operation of a compulsory insurance, foreign-funded insurance can quickly and effectively increase awareness among individual customers and develop the company’s reputation. Personal customers, opening up personal business opportunities."

“With the development of foreign investment in the strong insurance market, we have gained a more direct opportunity for all-round service owners, which has made our service efficiency and the customer's service experience have significantly improved.” Li Bao Insurance relevant person in charge said that despite Faced with a wider range of price competition pressures, it will still adhere to a service-oriented non-price competition strategy, stably seek progress, and strive to provide insurance services for existing customers and potential prospects.

Allianz Insurance believes that foreign investment in compulsory insurance can introduce advanced claims concepts and technical support from foreign countries, which will bring substantial improvements to the Chinese car owners, thus stimulating the upgrade of the entire car insurance market.

Insiders pointed out that foreign-funded insurance companies with long history and mature technologies can use advanced underwriting policies and quality claims services to meet the diversified needs of insurance consumers, and at the same time they can achieve higher levels of development.

Consumers are immature in insurance transactions

While foreign auto insurance develops China's auto insurance market, it also encountered many problems. “Foreign auto insurance companies have relatively few outlets. In provinces where foreign institutions do not have establishments, it may not be so convenient if there is a risk situation, such as surveying and assessing damages and other services. Only the public assessment network can be used, but the current domestic assessment of the overall service Quality and effectiveness are still unstable.” Allianz Property Insurance stated that in the future, foreign companies will pay more attention to the optimization of channel networks and customer service experience.

"China's auto insurance market is still not mature enough, and there is room for further improvement in the integrity of all parties in the market. Most consumers are also not mature enough in insurance transactions, mainly because they take the initiative to give up detailed understanding of insurance products and services prior to insuring. Rights are easily misled by rough price competition, and they only focus on product prices, etc.” Lipo Insurance said, “These issues have led to a small number of insurance companies that use services, especially back-end claims services, as their core competitiveness. For some companies that have discounted competitive low-price competition strategies, our apparent competitiveness has shrunk dramatically, so our current customers are mainly non-price-sensitive mid-to-high-end customers, although their ultimate service is value for money. They are only a minority of car owners, and the advanced service concept of foreign car insurance has not been deeply experienced by the majority of car owners.The market share is very low, this is still a problem that foreign car insurance currently faces and needs to be improved.We will stick to our core Under the premise of service strategy, broaden the cooperation with intermediary channels, Word of mouth word of mouth and other effective multi-channel publicity and other ways to cope. "

Facilitate the diversification of the market
Although there are many difficulties in operating in the Chinese market, foreign capital is actively exploring the auto insurance market in China and is optimistic about the auto insurance market in China. Allianz Insurance stated that opening up the strong insurance market to foreign capital is conducive to the diversified development of the market. The introduction of mature operating experience of foreign companies can help China's auto insurance market. There is more room for consumers to choose. For the entire industry, it is possible to promote exchanges between domestic and foreign insurance companies and upgrade existing technology and service levels.

The United States Liberty Insurance said: "China's auto insurance market is a thriving Chaoyang market. Although there are still issues such as immaturity and rough competition, we are still convinced that it is a developing market with huge potential, because we are already delighted. Seeing that some consumers are rationally mature before insuring, they pay more attention to the quality of service rather than the simple price, and they are more concerned about the post-insurance rights rather than the underwriting discount. More and more consumers in this part are us. Adhere to the confidence of the current concept of service competition, although we will pay more for this, we are convinced that the maturity and improvement of the market is only a matter of time. We are willing and able to wait for this promising glory."

AIU Insurance stated that they plan to start from the point of view of road safety. They also hope to establish some data relating to the driver’s driving situation in the market education, and risk pricing based on other factors such as the driving habits of the market segments, and strive to make changes for years. China's auto insurance pricing "follow the car with people" status.

“More and more foreign insurance companies entering the TAC market will further exacerbate market competition and bring some impact on domestic insurance companies, but they will be tenaciously able to fight.” said Li Lewen, partner of KPMG China Insurance Industry in China. Due to Chinese consumers' preference for online consumption, that is, eagerness for everything can be completed on the Internet; if foreign insurance companies can use their overseas experience to develop online direct sales channels faster and more effectively than local insurance companies, this will The earth attracts consumers and expands its market share.