Event: on April 15, 2022, the China Banking and Insurance Regulatory Commission issued the measures for the administration of life insurance sales (Draft for comments) (hereinafter referred to as the draft for comments). We believe that the positioning of commercial insurance in this document has changed to a certain extent, and more emphasis has been placed on the appropriate management of “prudent allocation, reasonable allocation and selective allocation”. Market chaos and prominent problems have been incorporated into the relevant provisions of the insurance law, and the industry regulation has been strengthened, Life insurance companies will further speed up high-quality staff increase and professional sales.
Pay attention to appropriateness management and delete relevant contents of marketing commission payment proportion and rhythm
1. This exposure draft is mainly divided into sales subject management (agent recruitment management, hierarchical management, information management, cooperative intermediary authorization management, etc.), sales business management (quality management, commission management, bancassurance cooperation management, etc.), pre-sales behavior management (product grading, compliance of publicity and training materials, etc.), and in-sales behavior management (appropriateness management, insurance proposal content, production conference management, etc.), After sales behavior management (return visit, problem handling, surrender and complaint, etc.) and supervision responsibility and legal responsibility (collect the deception, concealment, misleading, prohibition of surrender, false arbitrage and other behaviors in the process of life insurance sales into the violation of the provisions of the insurance law);
2. The exposure draft focuses on the appropriateness management of the insured’s insurance demand, risk tolerance and continuous payment ability. In the past, appropriateness management was usually emphasized in the field of investment. We think this change deserves attention. We interpret it as that in the future, life insurance will be a special part of the whole multi-level guarantee system to meet the needs of some people, with a long consumption process (long payment and guarantee period), The characteristics of prudence and traceability, as well as the collection of market chaos and prominent problems into the relevant provisions of the insurance law, have greatly strengthened the regulation of the industry;
Compared with the previous version at the end of last year, the draft for comments mainly has the following three changes:
1. The provision that “the proportion of initial Commission shall not be higher than 40% of the direct commission of the policy, and the period of renewal Commission shall not be less than the lower of 10 years and the payment period of the policy” is deleted. This change will greatly reduce the impact on the team of short-term agents. We believe that the biggest crux of current life insurance lies in the extremely high marketing cost under the pyramid structure, and this new regulation temporarily avoids this problem;
2. Re classify the products and include ordinary serious illness products into the first category of products, that is, basically all agents can sell ordinary serious illness insurance, while in the previous version, traditional serious illness is classified as medium and complex products, and new agents may not have the right to sell, which will greatly affect the commission income of newcomers;
3. The statement that insurance companies can stay at bank outlets is deleted, and qualified banks are encouraged to establish a professional insurance sales team to improve the degree of specialization of insurance sales;
The priority of high-quality development will be higher than scale development, and the development logic of life insurance team will change
1. We believe that after the implementation of the exposure draft, the factors concerned by previous policies, such as industry scale, industry growth rate and industry stability maintenance, will give way to high-quality development (customer rights and business quality above all), and the supervision is committed to reducing various excessive marketing behaviors of insurance companies (product speculation and strong promotion); The orientation of supervision on commercial insurance is more “prudent allocation, reasonable allocation and selective allocation”;
2. The exposure draft manages “live broadcast, we media account, Internet Group and other new network channels” according to the standards and processes of the product description meeting in a broad sense. It is necessary to completely save the relevant video, audio and graphic materials, ensure that the sales publicity content meets the regulatory provisions, and implement the retrospective management according to the key links of insurance sales behavior. Therefore, all kinds of Internet thinking The product promotion logic in the name of innovation will be difficult to get through under the new regulations, and the way out is to take the basic management in a down-to-earth manner;
3. We believe that the current high-quality staff increase is no longer a “number”, and the low-quality staff increase is nothing more than a waste of expenses, resources and space. The only way to increase the income of salesmen is to do professional sales by providing an overall insurance allocation scheme. The resources of insurance companies will also shift from short-term business competition to the ability training of agents;
Investment suggestion: we believe that the positioning of commercial insurance in this document has changed to some extent, with more emphasis on the appropriateness management of “prudent allocation, reasonable allocation and selective allocation”, and the market chaos and prominent problems will be included in the relevant provisions of the insurance law. The industry regulation will be strengthened, and the high-quality increase and professional sales of life insurance companies will be further accelerated compared with the previous version, The commission payment proportion and rhythm deleted in the draft for comments and the revised product classification will weaken the short-term sales impact of the industry; Since March this year, we have seen some positive signals on the liability side of life insurance. We believe that it is mainly due to the weak performance of the equity market, the shift of asset allocation of some residents to savings insurance, and the fact that most companies no longer rely on the single product of serious illness, but implement diversified product strategies such as increasing life expectancy. We expect the decline of NBV of Guoshou Ping An and other companies to be significantly narrowed in the second quarter of 22; In terms of individual stocks, we recommend China Life Insurance Company Limited(601628) , which is superior to the industry on the liability side and has greater flexibility on the asset side, AIA, which benefits from the US interest rate increase and US $10 billion repurchase, and China property insurance, which has improved the pricing factor of auto insurance and upgraded non auto insurance control measures;
Risk tip: the growth rate of new orders is lower than expected, the income of agents continues to decline, the sales supervision is further tightened, the large-scale thunderstorm of non auto insurance such as liability insurance enterprises, property insurance, credit insurance, etc., the long-term risk-free yield has decreased significantly, and the equity market has fallen sharply.
