The Present Situation and Prospect of Bank Insurance in China

First, the current situation of bank insurance in China

1. The life insurance industry in China has developed rapidly.

At present, among all kinds of insurance products in China, life insurance products (including annuities) are the most attractive to banks. By providing life insurance and endowment insurance products, banks can not only gain the advantages of life insurance products in accumulating funds at a lower cost, but also share the benefits of long-term growth of life insurance industry, and also enter the endowment insurance market with rich profits and great growth potential.

The cooperation between bank and insurance makes life insurance companies and banks achieve a win-win situation. Take building behavior as an example. By the end of 20001,its agency life insurance business income was 7.2 billion yuan, an increase of 75% over the previous year. Compared with 1997, which was less than 1 100 million yuan when it was launched, this business has become an important intermediary business of CCB. In 2002, the premium income of China Life12871900 million yuan came from bank insurance; Ping An Life Insurance Company of China's bancassurance business exceeds 1000 billion yuan, accounting for 20% of its premium income; The bancassurance of Xinhua Life Insurance has increased by more than 1200%, even exceeding the total premium income of 200 1 year; Taiping Life Insurance, which just resumed business, earned more than 1 billion yuan in bancassurance last year, accounting for more than 70% of its total premium income. In 2003, its bank insurance income exceeded 3.3 billion yuan.

The increasing popularity of bank insurance in the life insurance industry shows new signs to all parties concerned, that is, bank insurance or part-time bank agents selling life insurance are becoming a rising backbone in life insurance sales.

2. The development of bank insurance in China's property insurance industry is relatively insufficient.

In recent years, reports on the cooperation between banking and insurance industry have been seen in the news media, mostly about how much premium an insurance company has realized and how much it has increased year-on-year. Bank insurance seems to have matured overnight, and customers seem to flock to banks to buy insurance at once, giving people the impression that bank insurance has been completely successful in China, and insurance companies and banks have achieved a win-win situation. In fact, the development of bank insurance in China can be said to be a cold and hot situation, that is, compared with the vigorous development of bank insurance in life insurance industry, the development of bank insurance in property insurance industry is relatively insufficient. Taking Liaoning Province as an example, according to statistics, in 2002, life insurance companies accounted for 92.44% of the banking agency market share in the province, while property insurance companies only accounted for 7.56%, and their business philosophy, marketing management, personnel training and resource utilization of banking agency business were far inferior to those of life insurance companies. In addition, according to IMI's survey of 5,524 samples in seven major cities (Beijing, Shanghai, Guangzhou, Chongqing, Wuhan, Xi and Shenyang) IMI 2000, the proportion of urban population participating in insurance in seven cities is 44%, of which Shanghai has the highest proportion, followed by Guangzhou with 44.9, Beijing with 44.6 and Chongqing with the lowest proportion of 32.9. And in seven major cities, the proportion of people who participate in various insurances through banks is:

As can be seen from the above, people who participate in life insurance through bank insurance are much higher than property insurance.

Second, the analysis of the reasons for the insufficient development of property insurance bank insurance

Generally speaking, the property insurance industry started late in the bancassurance business, and a good cooperation mechanism with banks has not yet been established. Although some property insurance companies have signed cooperation agreements with many banks, most of them are framework agreements, which are only in the initial stage, lacking substantive content, and even failing to improve the statistical index system and find out the business background. To sum up, the main factors restricting the development of property insurance and bancassurance business are as follows:

1. Backward thinking and insufficient attention.

Bank insurance is still a new thing in China, which requires banks and property insurance companies to attach great importance to it, make long-term plans and have a set of ideas. When developing this business, many banks pay attention to the level of handling fees, but do not pay attention to the improvement of the overall quality of counter sales staff, the adjustment of work pressure, the familiarity of insurance business and so on. , but not from the height of improving business structure, improving business quality and enhancing development potential; As far as property insurance companies are concerned, their business philosophy is still backward and they lack sufficient understanding of bank insurance. They are just used to the traditional extensive business model, relying on low-level competition means such as bank outlets, reducing premiums and increasing commissions, and using crowd tactics to expand the scale of premiums. Moreover, they have not paid attention to bank insurance from the perspective of marketing mechanism innovation, and put it in an important development position.

2. The degree of cooperation is shallow and the way is single.

At present, the bancassurance cooperation in the domestic property insurance industry is only a shallow cooperation at best. From foreign experience, the cooperation between banks and insurance companies should be a long-term and benefit-sharing relationship. However, the agency agreements between most domestic banks and property insurance companies are mostly one-year, and this short-term agreement is very arbitrary, so it is difficult to ensure that property insurance companies will have a stable source of premium income in the future. In addition, because the technical content of property insurance products sold by banks is much higher than that of traditional insurance distribution methods, banks and insurance companies should establish a unified operation platform based on technological innovation, use modern information network technology and rely on the huge branch network of banks to provide customers with convenient and perfect pre-sales and after-sales services and actively innovate marketing methods. However, at present, most of the bank insurance carried out by property insurance in China still uses the traditional sales method, and the bank credit department uses the means of credit restriction to forcibly sell insurance to loan enterprises or individuals. For example, in mortgage insurance, banks and insurance companies cooperate well, but it is counterproductive for the partners to force the lenders to pay insurance fees for their own interests.

3. Product innovation is lagging behind, and the types of insurance are single.

Because banks sell products as agents, property insurance companies have never been in direct contact with policyholders, which requires that property insurance products suitable for bank sales be simple in form, easy to operate, suitable for counter sales, and linked with the traditional business of banks, which can not only better attract bank customers, but also mobilize the enthusiasm of bank agents. However, judging from the products launched by various property insurance companies at present, the main problem is that there are too few types of insurance suitable for bank counter sales, which greatly limits the breadth and depth of bank-insurance cooperation. Therefore, banks and insurance companies are mainly based on mutual agency, and there are not many substantive "strategic alliances". Cooperative products are still dominated by traditional products, especially traditional property insurance products such as home insurance are not favored by the public, and the popular products specially designed for bank marketing are even more lacking. On the contrary, many companies in the field of life insurance, such as Ping An Insurance, China Life Insurance, AIA, etc., have launched many insurance products specifically for bank sales.

4. Low technical level and obvious obstacles.

Customers buy insurance at the bank counter mainly to facilitate the purchase procedures and after-sales service. However, due to the low degree of computer networking between banks and property insurance companies, the uneven level of electronic management, inconsistent models and software specifications, all outlets of both parties cannot be fully networked, and the manual operation of agency business has greatly hindered the rapid development of business. In addition, capital exchange and risk prevention need the support of corresponding computer hardware and software equipment. At present, property insurance companies have not paid attention to the development and establishment of the after-sales service network system of bank agency insurance, and the technical strength and software and equipment in developing bancassurance business are still insufficient, and the technical and equipment levels among banks are also uneven, making it difficult to carry out in-depth bancassurance cooperation and innovation.

5. There are differences in agency fees, and life insurance is favored.

The difference in agency fees makes property insurance less competitive than life insurance. Life insurance products generally have a long term, and their agency fees can be shared within a long insurance period. Therefore, the agency fees paid by life insurance companies to correspondent banks are generally high, while the term of property insurance products is generally short, so it is difficult to maintain the agency fees at a high level. The difference in agency fees leads bank agents to prefer to sell life insurance products.

6. Cooperation only seeks form, regardless of cost.

With the increasing number of market participants and the lifting of the restriction of "one-to-one" agency relationship, while the bancassurance business is developing rapidly, the implied fierce market competition is also intensifying, and the focus of competition is directly reflected in the level of commission payment standards of various companies. In order to seize the market, property insurance companies do not hesitate to adopt a competitive strategy of paying high fees and rarely calculate the costs of products and customers. In addition, publicity and hardware investment may eventually make this business unprofitable or loss-making, laying a profit trap for itself and challenging the standardized operation of bank-insurance cooperation. If effective measures are not taken to prevent it, it will inevitably form an irregular bank agency market similar to the disorderly competition situation of "airline insurance" in the past.

7. Pay more attention to relationship than training, ignoring quality.

The survey found that the business volume of bank agent outlets has a great relationship with the enthusiasm and initiative of the person in charge of bank outlets and counter staff to promote business. Therefore, most property insurance companies pay more attention to dealing with and maintaining interpersonal relationships, ignoring the training of business personnel in banks and postal outlets, which makes the tellers in outlets lack systematic training in property insurance knowledge, investment knowledge and exhibition skills, leading to agents not knowing or being clear about the terms and contents of products and publicity requirements. In the process of explaining to customers, mistakes or misleading will inevitably occur, leading to surrender or disputes.

8. Poor incentive mechanism and insufficient motivation.

Although the top management of the bank is willing to expand the intermediary business under the current poor profit of the traditional deposit and loan business, the middle-level managers of the bank take the amount of deposits as an important indicator to assess the grassroots work from their own interests. Increasing property insurance agency business can't increase deposits, so the enthusiasm of bank grass-roots employees for insurance business is affected to some extent.

Third, blaze new trails and seek the development of property insurance and bank insurance.

Faced with the above-mentioned constraints on the development of bancassurance business in the property insurance industry, property insurance companies can only accelerate the healthy development of bank insurance business in the property insurance industry by changing their concepts, pioneering and innovating, strengthening marketing, controlling risks, innovating products and services, and improving incentive mechanism and customer relationship management. Specific suggestions are as follows:

1. Change ideas, raise awareness and open up new ideas.

Property insurance companies can't just put banks in the position of agents. They need to further strengthen their contacts with agent banks at all levels, actively coordinate contacts, exchange information and study countermeasures. At present, China's economic development situation is good, and the total assets of residents are increasing. In 2002, China's household savings rate was as high as 39%, and the household purchase rate also showed an upward trend, which made the demand for risk transfer rapidly expand, thus providing a broad space for personal property insurance and opening up a wide range of channels for personal bank insurance business. Secondly, the huge potential of the import and export freight insurance market has built a platform for the bancassurance business of the property insurance industry. From the perspective of China's insurance market, the freight insurance premium was 3.8 billion yuan in 2000, 465.438 billion yuan in 20001year and more than 4.5 billion yuan in 2002, and the import and export freight insurance premium income accounted for half of the freight insurance premium income. With China's entry into WTO, the import and export trade is growing strongly, and the market prospect of import and export freight insurance is attractive. Due to the large number of freight insurance policies and low average premium, property insurance companies tend to establish agency relations with the international business department of banks in order to save manpower and vigorously expand import and export freight insurance. In addition, the rapid development of high technology, especially the gradual formation of six pillar industries, will expand the cooperation between property insurance companies and banks from simple agency underwriting to risk consultation and control, and the types of underwriting will also be broadened from enterprise property insurance to construction engineering insurance, installation engineering insurance and employer liability insurance. By cooperating with banks, property insurance companies can find shortcuts to participate in large and medium-sized insurance projects, thus making it possible to quickly enter the powerful customer network of banks and expand the breadth and depth of market development.

2. Based on the long-term, integrate resources and consider systematically.

On the basis of changing ideas, property insurance companies must base themselves on the long-term, establish an all-round modern business philosophy, avoid short-term behaviors, make overall strategic plans for bank insurance business, including development goals, institutional settings, partners and cooperation methods, actively adopt the form of strategic alliances, and reach close cooperation with cooperative banks in order to quickly seize the market, establish a mature back-office operation system as soon as possible, and establish advantages in product development, marketing and computer systems. In the early stage of the development of bank insurance business, especially in the current situation of low awareness of national insurance and imperfect social insurance system, it is difficult to develop the business. Both sides must systematically consider, find a breakthrough, do a good job in all basic work, avoid giving up halfway because the short-term benefits are not obvious, and conscientiously do a good job in all services, including strengthening the training and publicity of bank agency outlets, and improving the enthusiasm of bank agency outlets.

3. Horizontal cooperation, straightening up and down, and building a platform.

First of all, we should straighten out the relationship between various departments of property insurance companies. After the property insurance company signed a cooperation agreement with the head office of the bank, the business department and the information technology department failed to keep up in time, which would make the cooperation agreement mostly a framework agreement, lacking substantive content and becoming a dead letter in fact. Secondly, we should do a good job in the coordination of general property insurance companies in bank insurance business. Now that the head office has signed an agreement with the head office of the bank, branches at all levels are fragmented on this issue, resulting in a waste of resources. Third, property insurance companies should conduct in-depth research on banks and select banks that meet the conditions of in-depth substantive cooperation as key partners.

4. Focus on breakthroughs and break the three bottlenecks of information technology, products and accounting.

1) for information technology cooperation. Using modern network technology to realize the networking between banks and insurance companies is the basic work to carry out bank insurance. The development of bank insurance business especially needs the support of information technology. Because insurance products need underwriting, information transmission and feedback are very important. Both sides must realize networking to improve their business ability and quality.

2) Strengthen product development. Property insurance companies should choose the types of insurance suitable for bank cooperation. At present, there are not many types of insurance in banks, so we must carefully select the insurance products to be launched and develop valuable mixed service products in combination with our own strength. On the one hand, they should provide simple, standardized and convenient financial services, on the other hand, they should integrate supportability, savings and investment to enhance the competitiveness of their products.

3) Improve the accounting system. In order to promote the development of bank insurance business, it is very important to effectively motivate banks, which requires further improving the accounting system and rationally distributing the interests of all parties. We should not only consider the whole bank, but also fully realize the important role of grass-roots employees in the implementation of specific work, and the incentive measures and interest distribution should be implemented at the grass-roots level. Banks and property insurance companies can adopt diversified incentive methods, jointly organize incentive activities, and comprehensively use income incentives, promotion, training, visits and exchanges, and participation in management.

5. Strengthen supervision and cultivate insurance development of property insurance banks.

The insurance supervision department should also strengthen the supervision of the cooperation between property insurance and bank insurance under the current separate supervision system. The development of bank insurance in domestic property insurance industry mainly focuses on agent sales insurance and agent collection and payment of insurance benefits. Therefore, on the one hand, the insurance supervision department should support the development of insurance business of property insurance banks, on the other hand, it should formulate relevant management rules to make property insurance bank insurance develop in a healthy direction.