Auto insurance has always been the foundation of the property insurance industry and the ballast of most property insurance companies. In 2023, under the combined impact of travel recovery, catastrophes, rising cost competition, and the advent of the second comprehensive reform, what kind of report card has the auto insurance market handed over, and the business situation of various insurance companies has attracted much attention from the market.
A few days ago, the 2023 property insurance company operation data disclosed by the State Administration of Financial Supervision and Administration showed that as of the end of December 2023, the motor vehicle insurance business operated by property insurance companies increased by 5% year-on-year64%, slightly exceeding the annual GDP growth rate. This reflects that the motor insurance business will continue to maintain a steady growth trend in 2023.
However, despite the positive growth rate of motor insurance premiums, it will not be easy for insurers to achieve underwriting profitability in 2023. According to the industry exchange data obtained by "A Smart Insurance", the auto insurance industry will achieve an underwriting profit of 90% in 20233.5 billion yuan, a decrease of nearly 60% over the previous year. Of the 64 industry entities that operate motor insurance, only 16 have achieved underwriting profits.
From the perspective of the competitive landscape, the situation of the Matthew effect and the strong Hengqiang has not changed, both market share and profits are highly concentrated in the industry giants, and the "old three" of property insurance have contributed nearly seventy percent of the market business share, as well as the underwriting profits that exceed the entire industry. This reflects the further narrowing of the space for small and medium-sized insurers to operate motor insurance business. However, there is no shortage of breakouts in the cracks, and some property and casualty insurance institutions have actively deployed new energy vehicle insurance business by virtue of their own resource endowments, promoting the rapid growth of auto insurance premiums.
The pattern of the strong has not changed.
There is no shortage of breakouts in the cracks.
With the recent disclosure of the operating data of the insurance industry by the State Administration of Financial Supervision and Administration, the operation of the motor insurance market in 2023 has been roughly revealed. According to the data, in 2023, the motor vehicle insurance operated by property insurance companies will achieve a total of 867.3 billion yuan in original premium income, an increase of 46.3 billion yuan from the previous year and a year-on-year increase of 564%。As the foundation of the property insurance industry, it is gratifying to see a steady increase in premiums in the motor insurance market.
Since the beginning of this year, there have been frequent policy guidelines at the national level to promote the expansion of automobile consumption, and the overall trend of new car sales has been positive, driving the steady growth of the auto insurance business. "For the reason for the steady growth rate of auto insurance premiums, some industry insiders analyzed.
According to the latest retail sales data of the Passenger Car Association, the retail sales volume of the domestic passenger car market reached 235 in December 202330,000 units, an increase of 8% year-on-year5%, up 131%；In 2023, the cumulative retail sales of passenger cars in China will be 2,16990,000 units, a year-on-year increase of 56%。
If we shift the perspective from macro to micro, it is not difficult to find that the pattern of Hengqiang, the strong player in the auto insurance market, has not changed. According to industry exchange data, the "old three" property insurance companies, namely PICC Property Insurance, Ping An Property Insurance and CPIC Property Insurance, will achieve a total of 602.9 billion yuan in motor insurance premium income in 2023, accounting for nearly 70% of the total market share. In terms of premium growth, the "old three" property insurance companies also performed steadily, with the growth rate of auto insurance premiums of PICC property insurance and CPIC property insurance both exceeding 5%, and the growth rate of motor insurance premiums of Ping An property insurance exceeding 6%.
It is worth noting that in the context of greater competition pressure in the auto insurance market, there are still some small and medium-sized entities that have achieved breakthroughs in the cracks, and the growth rate of auto insurance premiums in 2023 is considerable. For example, two Internet property insurance companies, Taikang** and Zhongan Property Insurance, have a premium growth rate of 35 per cent respectively29% and 2955%。
In addition, the motor insurance business of two insurance companies with Internet shareholder background also performed well. For example, Samsung Property Insurance, in which Tencent has a stake, will have a growth rate of 25% in auto insurance premiums in 202308%；Hyundai Property Insurance, in which Didi Chuxing has a stake, will have a growth rate of 49 auto insurance premiums in 202363%。
There are also some insurance companies with the background of car company shareholders are also making silent efforts. For example, Zhongcheng Insurance, which is controlled by Guangzhou Automobile Group, will have a growth rate of 31 auto insurance premiums in 202379%；Hezhong Property Insurance, in which Geely Holding Group is a shareholder, also saw a growth rate of 30 percent in auto insurance premiums91%。
As for the reasons why some small and medium-sized insurance companies have broken through the auto insurance business against the trend, some professionals pointed out that on the one hand, it may be due to the fact that these insurance companies have accelerated their efforts in the new energy vehicle insurance business, so as to achieve corner overtaking; On the other hand, it is also related to the fact that some property and casualty insurance companies have strengthened their digital and technological capabilities and formed a dislocated competitive advantage in segmenting their businesses.
Expense competition is superimposed on loss growth.
Auto insurance underwriting margins plummeted.
Although the scale of motor insurance premiums will maintain steady growth in 2023, it has to face the reality of a sharp year-on-year decline in underwriting profits.
Industry communication data shows that the auto insurance industry will achieve an underwriting profit of 90 percent in 20233.5 billion yuan, a decrease of 128 from the previous year2.8 billion yuan, a decrease of 5867%。Of the 64 industry entities that operate motor insurance, only 16 have achieved underwriting profits. In other words, three-quarters of insurers' motor insurance business underwrites losses.
First of all, let's look at the "old three" property insurance, and the total underwriting profit of the auto insurance business in 2023 will be 1283.9 billion yuan, a year-on-year decrease of 4239%。However, even though the underwriting profit of the "old three" auto insurance business of property insurance has generally declined, it still contributes to the underwriting profit that exceeds that of the entire industry. Among the insurance companies that underwrote losses in the motor insurance business, 15 lost more than 100 million yuan.
Analyzing the reasons behind the sharp decline in the underwriting profit of the auto insurance business, in the eyes of industry insiders, this is not unrelated to the normalization of vehicle travel in 2023 and the impact of climate disasters, which will promote the increase in the loss ratio of auto insurance. In addition, the high loss ratio of new energy vehicle insurance also has a certain impact.
According to the data, from the perspective of the industry's comprehensive loss ratio for the two full operating years from the beginning of 2022 to the end of 2023, it is V-shaped ** after bottoming out at the end of 2022, and it has been higher than the 24-month flat ** in the second half of 2023, with a comprehensive loss ratio of more than 70%.
In addition to the increase in the loss ratio, in 2023, with the official launch of the second comprehensive reform of auto insurance nationwide, the pricing autonomy of insurance companies will be expanded, and the vicious competition of handling fees will appear again, which will also lead to an increase in the comprehensive expense ratio of the industry. According to the data, from the perspective of the industry's comprehensive expense ratio for the two full operating years from the beginning of 2022 to the end of 2023, the annual 2023 year will be higher than 224 months**, indicating that the cost-oriented market competition among industry entities has begun to recover.
In June 2023, the State Administration of Financial Supervision and Administration (FSC) issued the Notice on Matters Concerning the Regulation of the Order of the Auto Insurance Market to guide insurance companies to operate in compliance and prudence. The document regulates the order of the auto insurance market from five aspects, including strictly prohibiting insurance companies from blindly competing for scale and grabbing shares, and requiring insurance companies not to deviate from the actuarial pricing basis and sell auto insurance products below cost. In addition, the document emphasizes that the CBIRC should continue to monitor the dynamics of the auto insurance market, focus on the fee level of each institution under its jurisdiction, and strengthen the supervision of the implementation of auto insurance rates.
Immediately after September 2023, the State Administration of Financial Supervision and Administration issued the "Notice on Strengthening the Management of Auto Insurance Expenses", which pointed out the issue of auto insurance costs. The "Notice" proposes to strictly manage the cost of auto insurance, and pay various operating and management expenses according to the actual situation, and no handling fees shall be arbitraged; Strengthen the accounting and control of handling fees, adhere to the principle of substance over form, and truthfully record them in the "handling fee expenditure" account; Do a good job of recording expenses in a timely manner, and do not unreasonably delay or record expenses in advance; Strengthen the management and control of intermediary business, and must not pay car insurance fees in disguised form through intermediaries.
Obviously, from the perspective of the result orientation of underwriting profits, seizing market share with higher handling fees and fighting the best way to operate the auto insurance business is to quench your thirst after all, resulting in a continuous narrowing of profit margins. To this end, many people in the industry have also issued an initiative to cherish the hard-won underwriting profitability and jointly maintain the market order of the industry.
New energy vehicle insurance challenges remain.
It is the trend of the times to face up to the problem.
2023 has come to an end, and the development trend of the motor insurance market in 2024 is more concerned by the market.
Focusing on the auto insurance market in 2024, a recent research report released by China Merchants ** pointed out that since the implementation of the comprehensive reform of auto insurance for more than three years, the phased goal of "reducing prices, increasing insurance, and improving quality" has been fully achieved, and at the end of November 2023, the eight leading property insurance companies signed the "Auto Insurance Compliance Management Self-Discipline Convention" to actively regulate the market order and strictly control handling fees. It is expected that with the strengthening of regulatory policies and industry self-discipline, the competitive landscape of the auto insurance market is expected to be further optimized in 2024, and the top insurance companies with stable and compliant operations are expected to further improve their underwriting profitability by virtue of their advantages in scale, brand, channel and data.
At the same time, as the most important part of China's consumption structure upgrading, automobile consumption will continue to maintain steady growth under the guidance of steady growth and pro-consumption policies, and the 2024 China Auto Market Development Summit predicts that China's auto market will enter a new stage of 30 million units in the future, so auto insurance premiums are also expected to achieve steady growth.
In fact, when it comes to the impact of automobile consumption on the auto insurance business, the rapid development of the new energy vehicle industry in recent years has also boosted the new energy vehicle insurance to become a new growth pole for property insurance companies. However, in the face of the high accident rate and loss ratio of new energy vehicles, insurance companies have begun to diverge their business strategies for new energy vehicle insurance, and even refuse to insure and delay underwriting.
In this regard, from the perspective of safeguarding the rights and interests of insurance consumers, the Property Insurance Supervision Department of the State Administration of Financial Supervision recently issued the "Notice on Effectively Underwriting New Energy Vehicle Insurance" to property insurance companies, requiring property insurance companies not to refuse to insure the compulsory insurance of new energy vehicles, and commercial insurance companies are willing to insure as much as possible, and shall not take unreasonable restrictions and underwriting measures such as "one-size-fits-all" for specific new energy vehicles in terms of underwriting policies and system control. Large property and casualty insurance companies should play the role of industry leaders, fulfill their social responsibilities, and actively underwrite commercial insurance for new energy vehicles.
In the face of regulatory policy requirements and consumer protection needs, how to operate new energy vehicle insurance has become a must-answer question in front of the industry.
At the "2023 China Insurance Summit 50 Forum and the 4th China Insurance Summit 108 General Ceremony" jointly organized by A Smart Insurance and the New Era Insurance Research Institute, Xie Yue, founder and CEO of Tea Ceremony Yancomb, former president of Tianping Auto Insurance, and former general manager of Jiulong Insurance, said bluntly that new energy vehicle insurance is the ultimate battle of car insurance.
Xie Yue pointed out that from the national level, to promote the development of the new energy vehicle industry chain has risen to the national strategic height, from a regulatory point of view, the first financial work conference deployed in the "five articles", many levels are associated with new energy vehicle insurance, the importance of new energy vehicle insurance, opportunities are self-evident.
As for how to deal with the challenges of the new energy vehicle insurance business, Xie Yue believes that the property and casualty insurance industry can explore the following aspects: for example, industry associations can set up a new energy vehicle insurance professional committee to focus on new energy vehicle insurance; Exclusive terms are rapidly iterated to open up room for rate increases; The regulator attaches great importance to the issue of new energy vehicle insurance, and strives for financial and tax support from relevant departments.
Obviously, including the new energy vehicle insurance business, there are still many difficulties and obstacles in the auto insurance market on the road to high-quality development, which requires insurance companies to strengthen their long-term strategies, abandon extensive business models, and take the road of refinement and specialization. It is necessary for the industry to work together to build a breakthrough around key stuck points and blocking points such as new energy vehicle insurance.
This article was first published on WeChat***a Smart Insurance. The content of the article belongs to the author's personal views and does not represent the position of Hexun.com. Investors act accordingly at their own risk.