Since 2023, in response to the investment pressure on life insurance, regulatory authorities have focused on implementing two major policies to reduce the cost of liabilities: first, lowering the predetermined interest rate of insurance products from 3.5% to 3% to prevent the risk of interest rate spread loss; The second is to use the integration of reporting and banking as the entry point, by setting an upper limit on channel commission fees, to prevent the risk of fee difference losses.
With the gradual implementation of the above-mentioned "combination punch", the insurance industry has ushered in a new round of deep adjustment. Some industries speculate that a significant decrease in sales commissions will inevitably affect the income of millions of insurance agents, and even affect the survival of thousands of insurance intermediaries. Recently, a Caixin reporter visited Shen Peng, the founder and CEO of Shuidi Company, to share his analysis of market hotspots such as the reduction of insurance product reservation interest rates and the integration of reporting and banking, and to make judgments on industry development trends.
Caixin News Agency: How to view the reduction of insurance product reserve interest rates in 2023 and the regulatory regulation of "integration of reporting and banking"?
Shen Peng: Regulatory measures help the industry optimize debt costs and prevent risks of interest rate and fee spread losses
In 2023, the original premium income of life insurance in China maintained a growth trend, but it also presented a situation where opportunities and challenges coexist.
In Shen Peng's view, the reduction of the predetermined interest rate of insurance products and the implementation of the "integration of reporting and administration" policy are targeted measures proposed by regulatory authorities to regulate the healthy development of the industry, which can help insurance companies optimize their debt costs and prevent risks of interest and fee spread losses.
In the short term, while reducing the debt cost pressure on insurance companies, it also releases potential protection needs of some users in advance. However, in the long run, guiding upstream insurance institutions through the above measures will have a very positive effect on the industry's long-term transformation towards high-quality development.
"Insurance companies are no longer promoting through a single adjustment of rates, and regulating the sales model of intermediary agencies from extensive to intensive can help reduce unfair competition in sales, promote the insurance industry to return to the source of protection, and effectively safeguard the legitimate rights and interests of insurance consumers." Shen Peng said.
It is reported that in the face of new requirements, Shuidi Company has also improved its professional and service capabilities through various means such as technology empowerment, professional training, and characteristic services under the guidance of new policies.
Caixin News Agency: What impact will the implementation of the combination of product reservation interest rate reduction and the integration of reporting and banking have on insurance intermediaries?
Shen Peng: The extensive business model driven by aggressive product pricing and high commissions in the past is difficult to continue, and market resources will be concentrated on top platforms
Shen Peng stated that the adjustment from the predetermined interest rate to the integration of reporting and banking, the adjustment of insurance product design and calculation, and the upgrading of sales and service positioning will bring long-term benefits to the insurance industry, especially for top institutions with stable operations, abundant funds, and high levels of intensive development, which can better serve customers through specialization.
In the new situation, Shen Peng believes that there are several trends in the impact of the insurance intermediary market:
One is that the industry operates more standardized and operates more steadily. The simple and extensive business model driven solely by aggressive product pricing and high commissions in the past will be unsustainable, and the intermediary industry will experience a virtuous situation of survival of the fittest. "From top to bottom, the development of intermediary institutions and agents' business will become more specialized, emphasizing professionalism and long-term business capabilities, and deeply exploring customers' real needs."
The second is to provide long-term benefits to leading companies in the industry. The adjustment of policy environment will put forward updated and higher requirements for institutional development. The regulatory authorities have provided the industry with sufficient time to reflect and transform their guidance on further promoting institutions to accelerate the breakthrough of the original extensive development model. While promoting transformation and upgrading, the industry will undergo short-term adjustments. In the pursuit of high-quality development, intermediary agencies with stronger professionalism and better services are more likely to achieve long-term value in benign competition.
"With the effective implementation of numerous regulatory policies and the concentration of market resources towards top intermediaries, insurance institutions with brand advantages and service efficiency are expected to stand out in the market and better promote industry transformation and upgrading." Shen Peng predicts.
Caixin News Agency: In the current critical period of industry development style transformation, how do you predict the development trend of the insurance industry in 2024?
Shen Peng: Internet insurance still has structural opportunities, and the market penetration of professional insurance intermediaries will be further improved
Under the policy guidance of high-quality development and transformation, the health, innovation ability, and sustainability of the industry will also be further improved. Shen Peng said: "As far as the insurance intermediary track is concerned, we believe that Internet insurance still has a very large structural opportunity."
On the one hand, with the emergence of new channels such as short videos and live streaming, the ways in which users obtain information and content online have become increasingly diverse. This has also made it more convenient for users to obtain insurance information and conduct transactions online, extending from simple insurance products to complex insurance, even family protection risk assessment, and asset allocation plans.
On the other hand, the popularization of online platforms and content creation tools has provided insurance practitioners with richer user interaction channels and methods. In Shen Peng's view, this also means that the integration of online and offline is further accelerating, and the insurance industry has the opportunity to enhance the digitalization of full process services, thereby more accurately meeting the differentiated and personalized protection needs of various consumers.
Another promising opportunity is to increase the market penetration rate of professional intermediary service models. With the development of the life insurance industry, the trend of separation between production and sales is becoming more and more profound. More and more insurance companies will focus on professional capabilities in risk distribution and investment management, and sales and service links will be more undertaken by insurance intermediaries.
With the increasing awareness of customers in insurance consumption, the insurance professional intermediary model is more easily favored by customers with its richer product selection and more professional and diverse services.
Caixin News Agency: What will be the next move for Shuidi Company?
Shen Peng: Continuously investing in offline brokerage business, creating customer value through "online efficiency+offline quality improvement"
At present, the close integration of insurance industry and digitalization has become a development trend. The insurance service scenario requires a lot of manual communication, and the documents, products, user needs, and data that staff need to record or handle are also very complex.
The emergence of big model technology has made a breakthrough in AI's natural language interaction and understanding capabilities, greatly liberating human labor. In the process of communicating with customers, it can not only greatly enhance the professionalism and accuracy of services, but also upgrade the user's interactive experience.
In Shen Peng's view, the implementation of new technologies such as big models in the insurance industry still requires a certain process, and the key lies in data. To improve the intelligence level of AI, a large amount of data needs to be used for training.
It is understood that Shuidi Company's businesses such as Shuidi Insurance, Shuidi Chiao, and Yifan Pharmaceutical are all focused on insurance protection and health services, which gives Shuidi Company a very precise user base and builds a very vertical big health service scene for Shuidi.
Shen Peng stated that in the next step, Shuidi Company will continue to promote innovation on the supply side of its products, especially by providing more customized and cost-effective insurance products for specific segments of the population. In addition, Shuidi will focus more on enhancing users' sense of gain and experience in insurance services, creating value for customers through a combination of "online efficiency enhancement" and "offline quality improvement".
Specifically, on the one hand, through digital empowerment, we can improve the efficiency of service processes; On the other hand, on the basis of online services, the layout of Shuidi's offline services will also be more inclined.
"We will firmly continue to invest in offline brokerage business and establish a highly reputable brokerage team. Finally, we will also maintain an open and win-win attitude, hoping to work with more partners to jointly build and share the achievements and experiences of intelligent insurance exploration, and continuously evolve around user needs." Shen Peng said.