The pilot expansion of exclusive commercial endowment insurance is imminent. In addition to the pilot areas of six pilot life insurance companies expanded to all over the world, pension insurance companies are also allowed to participate in the pilot of this business. The industry regards exclusive commercial endowment insurance as an important business for the insurance industry to participate in the third pillar of endowment insurance.
At present, there are 9 pension insurance companies in China, plus 10 national pension insurance companies under construction. According to the reporter, for this group, it began to explore whether to carry out exclusive commercial endowment insurance business last year, and the choice of participating in this business is not easy. Because some companies were actually positioned as pension management companies before. If they carry out this new business, they need to change their positioning and business layout, and need to re-establish a complete set of process mechanisms for insurance business.
Selection of pension insurance companies
Recently, the China Banking and Insurance Regulatory Commission issued a document that since March 1, the pilot area of exclusive commercial endowment insurance has been expanded to the whole country. Meanwhile, on the basis of the original six pilot companies, pension insurance companies are allowed to participate in the pilot of exclusive commercial pension insurance. Thus, the pension insurance company was officially released for exclusive commercial pension insurance business. Previously, the China Banking and Insurance Regulatory Commission said in December last year that it “supports qualified pension insurance companies to participate in the pilot of exclusive commercial pension insurance.”
Pension insurance companies have been discussing whether to carry out exclusive commercial pension insurance business for some time. According to the reporter’s preliminary understanding, relevant people of Ping An pension, everyone pension and Taikang pension all said they would actively participate in this business pilot. Most of the other companies that have not yet made clear their voice are still in the discussion stage.
Ping an endowment insurance stakeholders said that the future will start from two aspects: first, actively apply for products and strive to become the first endowment insurance company to develop exclusive commercial endowment insurance products. Polish products according to requirements, focus on key customers such as unconventional employment groups, and create relevant terms scientifically and flexibly; The second is the overall planning, including the pilot of exclusive commercial endowment insurance into the scope of welcoming the implementation of the third pillar policy, allocating resources and actively preparing.
Wang Xiaokang, deputy general manager and chief actuary of pension, said that the expansion of the pilot scope of exclusive commercial pension insurance is a rare opportunity for pension insurance companies. Everyone is actively studying and judging policies, polishing product schemes and striving to launch products with market influence.
In the view of Ping an endowment insurance people, the participation of endowment insurance companies in exclusive commercial endowment insurance has the following advantages:
First, the advantages of carrying out individual tax deferred commercial endowment insurance. Endowment insurance companies are the participants in the pilot individual tax extension insurance since 2018. After four years of practice, they have accumulated experience in sales, products and system support. The exclusive commercial endowment insurance is highly similar to the individual tax extension insurance.
Second, the advantages of opening up the two and three pillars of pension. The main pension insurance companies are the trustee and investment institutions of the second pillar annuity. In the future, with the support of the third pillar policy, they will integrate potential third pillar products such as annuity and exclusive commercial pension insurance to coordinate and open up the second and third pillars of personal pension.
Third, the advantages of group insurance business. The exclusive commercial endowment insurance that has been carried out focuses on unconventional employment groups, such as takeout, express, etc. In cooperation with internet platforms, pension insurance companies, as traditional group pension insurance companies, have advantages in product actuarial and marketing, which will accelerate the development of exclusive commercial pension insurance.
“The old-age insurance company that already has insurance business estimates that as long as it applies, it can be approved to carry out this business.” Another endowment insurance person said that if an endowment insurance company that has not carried out contractual insurance business wants to carry out business, it may need to conduct sufficient demonstration.
At present, there are many companies that have not carried out contractual insurance business, including Guoshou pension, Changjiang pension, Xinhua pension, PICC pension and Heng’an standard pension. If they are involved in the field of exclusive pension insurance, they will need to improve the system construction, service outlets and other aspects, and there is not a lot of work to be carried out. According to the reporter’s preliminary understanding, at this stage, some pension insurance companies prefer to only do trust off balance sheet business, that is, focus on pension management.
Product positioning or different from life insurance companies
The head of the product department of a number of pension insurance companies said that in terms of exclusive commercial pension insurance products, there is no obvious difference between the products made by pension insurance companies and life insurance companies. However, in the long run, pension insurance companies have long-term motivation to do this business. Because the regulatory authorities guide pension insurance companies to focus on the “pension” field, this product may be an important form for pension insurance to participate in the third pillar business.
“The product form has been relatively fixed. The difference between the exclusive commercial pension products of life insurance companies and pension insurance companies will not be too great. We are still demonstrating that it will be positioned as the main breakthrough product.” Senior executives of a pension insurance company revealed that there were some innovations in the channels of the business.
From the current business situation of pilot life insurance companies, according to the disclosure of the cbcirc, the pilot of exclusive commercial old-age insurance has operated smoothly and received good social response since it was launched in June 2021. By the end of January 2022, six pilot companies had underwritten nearly 50000 insurance policies, with a total premium of 400 million yuan, including nearly 10000 employees of Shenzhen New Industries Biomedical Engineering Co.Ltd(300832) new business types such as couriers and online car Hailing drivers.
Compared with the total business volume of trillions of premiums of six pilot life insurance companies, the business scale is still small. Many people in the insurance industry said that the exclusive commercial endowment insurance is designed to be extremely “inclusive” – at present, all life insurance companies do not charge initial fees, and some companies are still selling at subsidized fees. However, from the perspective of the offline main sales force, the Commission proportion of this product is very low, and the salesperson has no motivation to take it as the main product. Therefore, the effect of this business will be lower than expected, especially there is a certain gap from the requirements of the third pillar development for insurance institutions.
The aforementioned ping an endowment insurance person said that active participation is the responsibility of the endowment insurance company. Pension insurance companies (including CCB Pension Company) are the only financial institutions with the word “pension”. Therefore, it is an inevitable choice for pension insurance companies with insurance business to actively participate in exclusive commercial pension insurance.
The middle-level of another pension insurance company said that the business channels of pension insurance companies and life insurance companies are different and face different customer groups. With the expansion of the pilot scope, this kind of products can be oriented to more people.
Regulators also said that by expanding the pilot scope, more consumers can be exposed to exclusive commercial pension insurance products with strong pension functions, and further guide and cultivate the concept of pension financial consumption; It is conducive to promoting pilot insurance companies to further explore the development of commercial endowment insurance, promote and standardize the development of the third pillar endowment insurance, and better meet the needs of multi-level endowment security.
Reshaping the business of pension insurance companies
During the interview with reporters, some pension insurance companies said that the business direction has not been determined and it is not convenient to speak publicly for the time being.
It is reported that for some pension insurance companies, whether to carry out exclusive commercial pension insurance is not only a question of whether to do this business, but also a question of where the whole company’s business goes. This is mainly because the exclusive commercial endowment insurance business is similar to the contractual insurance business, with guaranteed account income and corresponding insurance guarantee liability, while some endowment insurance companies have not been involved in this kind of insurance business.
According to insiders, based on the specific establishment background and development history, some pension insurance companies are actually positioned as pension management companies rather than insurance companies. All business systems, Department structures and personnel settings are formed around trust pension management capacity-building and business development.
Therefore, the pension insurance company previously positioned as a pension management company should carry out exclusive commercial pension insurance business, which is equivalent to changing the positioning and business layout and re establishing a complete set of process mechanisms of insurance business, including insurance business personnel and systems, such as underwriting and claim verification, actuarial evaluation, it system, etc.
At the same time, the supervision system of contract insurance business is also very different from that of trust business. For example, the exclusive commercial endowment insurance business belongs to the on balance sheet business of insurance companies, which needs to withdraw capital and is subject to the regulatory constraints of solvency indicators.
It is reported that the China Banking and Insurance Regulatory Commission issued the notice on regulating and promoting the development of pension insurance institutions at the end of last year to promote pension insurance institutions to focus on the development of businesses reflecting pension attributes, such as commercial pension insurance, pension security management and enterprise (occupational) annuity fund management. The notice also requires pension insurance companies to adjust their asset management business.
The regulatory authorities require that all pension insurance institutions submit the company’s positioning, transformation and business planning plan before June 30. At that time, the development direction of pension insurance companies will be more clear.
