Matters:
According to Shanghai Securities News, on April 15, the China Banking and Insurance Regulatory Commission recently issued the measures for the administration of life insurance sales (Draft for comments) (hereinafter referred to as the "new draft") to insurance companies for comments in the industry.
Ping An View:
Compared with the version reported by Shanghai Securities News at the end of November 2021, on the basis of fully covering all subjects of the life insurance industry and standardizing the whole process of sales activities, the new opinion draft focuses on further optimizing the agent classification time point and classification sales requirements, commission proportion restrictions, bancassurance channels, customer classification management and matching sales, and retains the strict requirements on self insurance parts and mutual insurance parts. Specific comments on the new draft:
1) clarify the time limit of hierarchical management of insurance salespeople and cancel the differentiated management of marketable products of insurance salespeople. The new draft also requires the establishment of a hierarchical management mechanism for insurance salespeople to implement hierarchical management for insurance salespeople; At the same time, it is required that the new manpower be rectified before December 31, 2023 and the existing manpower be rectified before December 31, 2024. At the same time, the previous version of the draft requires that insurance salespeople of different levels can only sell products of corresponding levels. The scope of products sold by newcomers will be narrowed, which will increase the difficulty of adding employees and retaining newcomers. In the new draft, this provision has been abolished and only the hierarchical management of insurance salespeople and insurance products has been clarified, which is more in line with the reality of product sales.
2) continue to strengthen commission management and optimize Commission proportion requirements. The previous version of the draft requires that "the initial commission paid by insurance institutions to insurance intermediaries shall not be higher than 80% of the initial premium; the payment proportion of the initial commission paid to salespeople shall not be higher than 40% of the direct commission of the policy". The new draft requires that "the proportion of commission in the total premium is limited by the additional fee rate at the time of pricing the products sold". The additional fee rate of the products is set by the supervision. Compared with the previous draft, it obviously relaxes the requirement of commission proportion and is more in line with the reality of product pricing.
3) cancel the bancassurance station and encourage banks to establish a professional insurance sales team. The previous version of the draft allows insurance institutions to carry out one-to-one in-depth cooperation with the exclusive cooperation outlets of commercial banks. Insurance institutions can send sales personnel to the bank outlets to provide auxiliary consultation or carry out insurance sales. However, the new draft has abolished this provision and still prohibits insurance companies from selling in banks. At the same time, the new draft proposes to "encourage banks with insurance agency business qualification to establish a professional insurance sales team". At present, the bancassurance channels of major listed insurance companies focus on value and transform to high-quality development. Among them, Xinhua strengthened cooperation with key channels, strengthened network maintenance, promoted linkage sales of regular payment and single payment, and realized secondary development of medium and high-end customers; TPO focuses on value and seeks long-term strategic partners; Ping An focuses on value management, continues to deepen reform, connects Ping An Bank Co.Ltd(000001) original wealth management business with bancassurance business, builds a " Ping An Bank Co.Ltd(000001) family" team with professional and entrepreneurial characteristics, optimizes the team structure and constructs a new model of bancassurance.
4) adhere to the hierarchical management of customers, the premium payment restrictions are tight and loose, and the core is still consumer protection. The new draft requires that the single premium of long-term insurance shall not exceed five times the annual income of the family, and the investment linked insurance and variable annuity shall not be insured over the age of 60. At the same time, the upper limit of long-term insurance premium in the annual income of the family shall be increased from 30% in the previous version to 50%.
5) it is clearly required that health and elderly care services and life insurance products shall not be forcibly matched for sale to protect the rights and interests of consumers. New draft requirements "Insurance companies, insurance intermediaries and insurance salespeople should distinguish between health and pension services other than insurance products and life insurance sales, isolate risks from each other, and clearly inform consumers of the service provider, rights and obligations. Health and pension services should be independently selected by customers, and insurance companies, insurance intermediaries and insurance salespeople should not combine health and pension services with life insurance products Mandatory matching sales ". In recent years, the mode of "insurance + pension community" matching sales and promoting high-end insurance sales with value-added services has prevailed. The admission qualification of pension community of mainstream insurance companies usually requires a total premium of more than 2 million yuan, but the community construction is still in progress and the occupancy rate is still limited.
6) it is forbidden to include self insurance and mutual insurance in the assessment. The new draft requires that "insurance companies and insurance intermediaries shall not purchase life insurance products as conditions for insurance salespeople to enter the company, become regular or promote, and shall not allow self insurance and mutual insurance to participate in any form of performance assessment and business competition". At the same time, it requires to "clarify the scope of self insurance and mutual insurance, insurance approval process, commission accrual and assessment rules, dispute handling and other contents", It is basically consistent with the opinion draft of the previous edition. Under the pyramid structure of the existing basic law and the agent team, the promotion of newcomers needs to meet a series of requirements such as first year premium, activity rate and renewal management, and the first year premium is particularly important. At present, the vast majority of insurance companies still include self insurance parts and mutual insurance parts in the assessment. On the one hand, some agents of grass-roots branches (especially newcomers) use self insurance parts and mutual insurance parts to complete performance assessment and obtain commissions; On the other hand, when these people fall off, there will be a huge demand for surrender, or it will nourish the surrender of black labor. If self insurance parts and mutual insurance parts become the norm, it will greatly affect the stability of the operation of insurance enterprises. CPIC 21q3 has completely cancelled the assessment and interests of self insurance parts and mutual insurance parts. We believe that after the formal implementation of the opinion draft, more insurance enterprises will make timely adjustments to the assessment and interests of self insurance parts and mutual insurance parts.
Investment suggestions: from the new regulations of Internet life insurance, to the draft of the new regulations of universal insurance, and then to the draft of the new regulations of life insurance sales, the supervision will continue to increase the size and standardize the sales behavior and product design of life insurance. The industry is facing a painful period of transformation. Under the pressure of new orders and total premiums, strict supervision will greatly improve the difficulty of transformation and delay the repair of the liability side. It is expected that the new deal will force the insurance industry to accelerate reform, promote differentiated development of the industry and improve the image and professionalism of the industry. From the liability side, at present, the manpower, new orders and NBV of the main listed insurance companies have not been significantly improved, the transformation of life insurance is still at the bottom stage, the inflection point of the liability side has not arrived, and the layout opportunities on the right side are still blowing. At present, the industry valuation and institutional positions are at the bottom of history. It is expected that insurance enterprises with clear strategy and firm reform will take the lead in improvement and have long-term allocation value; At the same time, it is suggested to pay attention to the sectors brought by the recovery of market sentiment β quotation.
Risk tips: 1) the equity market fluctuates greatly, β Property led to increased volatility of the sector market. 2) The number of agents continued to decline, the quality improvement was less than expected, and the new orders fell more than expected. 3) The interest rate is lower than expected, and the allocation of maturing assets and new assets is under pressure.
