An announcement that an insurance professional agency company voluntarily withdrew from the insurance agency market unveiled the current situation of the insurance intermediary market leaving the market. On December 6, the Beijing Business Daily reporter found that since the beginning of the year, the local banking and insurance regulatory bureaus have successively cancelled the insurance agency business licenses (hereinafter referred to as the "licenses") of nearly 3,000 insurance intermediaries, of which 2787 insurance concurrently operating agency licenses have been cancelled, and 72 insurance professional intermediary licenses have been cancelled. Auto agencies exceed 50% of the total number of cancellations.
Industry insiders said that insurance intermediaries are affected by the double impact of the decline in market size and strict supervision, and there will be a situation of "survival of the fittest" in the short term. As the market continues to upgrade, insurance intermediaries will face obsolescence if they do not change with the market changes.
More than 2,800 intermediary licenses were cancelled
A paper announcement led to a "farewell wave" of thousands of insurance intermediaries to the insurance business this year. Recently, the official website of Jiangsu Banking and Insurance Regulatory Bureau shows that Jiangsu Huawei Insurance Agency Co., Ltd. voluntarily withdrew from the insurance agency market, combined with the previous announcement, the company became the first company in the country to voluntarily withdraw from the insurance agency market.
For this voluntary withdrawal from the market, an insurance practitioner told the Beijing Business Daily reporter that usually, the reason is on the one hand, business problems, on the other hand, compliance issues. The Beijing Business Daily reporter found that on December 8 last year, due to the preparation of false financial information, Jiangsu Huawei Insurance Agent received two fines issued by the Suzhou Banking and Insurance Regulatory Bureau.
This bid farewell to insurance intermediary business is just the tip of the iceberg year-to-date. Statistics have found that since the beginning of this year, the local banking and insurance regulatory bureaus have successively cancelled the licenses of more than 2,800 insurance intermediaries. Among them, the licenses of 2787 insurance concurrently operating agencies have been cancelled, and the licenses of 72 insurance professional intermediaries have been cancelled. In addition, 21 companies are in the process of planning to cancel their licenses.
"In recent years, the number of cancellations of insurance professional agencies and part-time agencies has been relatively large, especially this year." In this regard, Li Wenzhong, deputy director of the Department of Insurance of Capital University of Economics and Business, analyzed that under the joint action of regulatory policies and market environment, the changes in cost and income have led to the lack of attractiveness of insurance agency business to some small and medium-sized agencies, which is the reason for the large number of cancellations of insurance intermediaries.
On the one hand, the operating costs have risen, and on the other hand, the risk of violations has increased. This also makes more and more insurance intermediaries choose to "default" farewell to insurance agency business. Beijing Business Daily reporter found that the reason for the cancellation of the license is mainly that the license expiration period has not been extended, and it was cancelled, which was 2457 cases, accounting for more than 80%. For example, on June 30, the Guangdong Banking and Insurance Regulatory Bureau cancelled the insurance licenses of 1639 institutions, including Zhongren Insurance Brokerage Co., Ltd., and the reason for the cancellation was that the validity period had not been extended.
In Li Wenzhong's view, there are two reasons why the expiration of the license expiration period has not been renewed, one is that market pressure makes a large number of intermediaries unwilling to apply for renewal after the license expires, so that it is naturally terminated, which may be the main reason. Second, insurance intermediaries have not been approved to apply for renewal after the expiry of their licenses because they do not meet regulatory requirements.
At the same time, he believes that the restructuring of the insurance intermediary market will eventually greatly reduce the number of market entities, and large and medium-sized insurance intermediaries will become the choice of the market.
Auto intermediary companies occupy "half of the country"
Bank outlets, 4S stores, travel companies... As one of the bridges connecting insurance companies and consumers, the importance of insurance part-time agencies is self-evident. From the perspective of cancellation, the licenses of 1585 insurance intermediaries in the automotive field were cancelled, accounting for more than 50% of the total cancellation, and the proportion of travel agencies was relatively large, 9.41%.
The companies whose licenses are cancelled cover the categories of car service, repair, sales, etc. For example, according to the official website of the Heilongjiang Banking and Insurance Regulatory Bureau on August 2, The Jinli Automobile Sales Company in Longjiang County, Heilongjiang Province, was cancelled because the expiration of the insurance license expired and was not renewed. Beijing Business Daily reporter contacted Heilongjiang Longjiang County Jinli Automobile Sales and other companies in this regard, and their responsible persons said that the company has stopped carrying out insurance-related business.
According to the data released by the China Association of Automobile Manufacturers in the past three years, China's automobile sales have declined for three consecutive years from 2018 to 2020. "Pull a hair and move the whole body", followed by a large number of 4S stores shut down and withdraw from the network. According to the "2020-2021 China Automobile Circulation Channel Development Report", a total of 3920 4S stores were withdrawn in 2020, with an average of more than 10 withdrawals a day.
The above-mentioned insurance practitioners said that because of the decline in automobile sales, auto agency companies are facing the situation of poor management of their main business or insurance business, such as the inability of insurance business to make a profit, resulting in the abandonment of insurance agency business and timely stop loss. But it is also possible that the insurance business will restart at any time as the market picks up.
At the same time, he said that after the cancellation of the automobile agency company, because of the lack of understanding of supervision, it did not withdraw according to the process, which led to the reason that the expiration of the validity period was not renewed, and the cancellation of the industrial and commercial business license was cancelled.
At the same time as the market declines, the insurance practitioners of automobile agency companies will also be "turned away" due to insufficient ability and other reasons. Li Wenzhong said that the auto agency companies are mainly written off by small auto repair plants, which have limited employees, limited quality of personnel, and limited insurance agency business, and it is difficult to meet the information construction requirements put forward by the regulatory authorities and are forced to withdraw from the market.
Upgrading services and compliance management are the "winning cheats" in the painful period
Behind the departure of the intermediaries around them, it is affected by the dual factors of the downturn in the insurance industry market, the insurance concurrently operating agencies and the strict control of the entire insurance intermediary industry.
According to data from the China Banking and Insurance Regulatory Commission, in the first 10 months of this year, the insurance industry's premium income was 3.9 trillion yuan, down 1.4% year-on-year, while the property insurance premium income was 0.96 billion yuan, down 4.14% year-on-year. The above-mentioned insurance practitioners told the Beijing Business Daily reporter that insurance intermediaries rely to a large extent on the size of the insurance industry market, and when the market scale is reduced, the scale of insurance intermediaries will also be reduced within the stage, and there will be a situation of "survival of the fittest" during the pain period. As the market continues to upgrade, insurance intermediaries will face obsolescence if they do not change with the market changes.
Li Wenzhong also said that the insurance intermediary business has an economy of scale effect, in recent years, the rapid development of Internet insurance, the formation of a large market pressure on small and medium-sized insurance intermediaries, this year's relative downturn in the insurance industry has increased this pressure, and the regulatory authorities have also been guiding the grouping and large-scale development of insurance intermediaries.
Regulatory documents such as the Provisions on the Supervision of Insurance Agents and the Measures for the Supervision of the Informatization Work of Insurance Intermediaries (hereinafter referred to as the Measures) have been promulgated successively. A large number of insurance concurrently operating agencies and insurance intermediaries "fled" at the beginning of the year. In January this year, the Measures proposed that during the one-year rectification and self-inspection period after implementation, insurance intermediaries would not be allowed to operate insurance intermediary business if they did not complete the construction of the information system.
The relevant person in charge of the Banking and Insurance Regulatory Commission said at that time that the small and medium-sized institutions in insurance intermediaries are often not as standardized as professional institutions in insurance agency business management, financial management and practitioner management, and it is more necessary to strengthen supervision.
In Li Wenzhong's view, the current strict supervision of insurance intermediaries in China has been continuing, and it will remain so for a considerable period of time in the future. At the same time, he suggested that insurance intermediaries should follow the law of market and industry development, take the road of large-scale development, and strengthen internal control and compliance management on this basis.
"Under the dual influence of supervision and market, the company that eventually 'survives' will definitely form its own characteristics, such as the advantages of channels, which can truly provide valuable services and products to users." The above-mentioned insurance practitioners believe that with the continuous optimization of the market, the pain faced by insurance intermediaries due to factors such as the decline in market size will not last for a long time.
On October 16 last year, Wang Lei, director of the Market Analysis Department of the Insurance Intermediary Supervision Department of the Banking and Insurance Regulatory Commission, said that "insurance intermediaries have become an important part of China's insurance market, and insurance intermediaries are an important bridge and link in insurance trading activities." The above-mentioned insurance practitioners believe that as an insurance intermediary company, it is necessary to gain the trust of customers, and users will be at ease to buy without worrying about being deceived. The second is to provide consumers with a series of convenient services from insurance application to claim settlement. The third is to accelerate the pace in the field of insurance technology, such as intelligent insurance can also provide users with better services.
Beijing Business Daily reporter Chen Tingting Hu Yongxin
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