The rapid development of internet insurance is the trend of the times

Chen Wenhui, executive director of China Finance Forum

Recently, the Internet finance community has a high degree of concern. There are many discussions among the industry, experts, scholars and the media. In the aspect of internet finance, the insurance industry took the lead in pilot testing and took the lead in piloting a specialization in Internet insurance. In 2013, it approved the establishment of a professional Internet insurance company, Zhong An Online, and accumulated some practical experience in internet insurance.

The rapid development of internet insurance is the trend of the times

In terms of using new technologies such as the Internet to improve services, the banking industry started with the basic functions of account inquiry and transfer payment, while the insurance industry was initially reflected in the sales side. Insurance is the financial format that took the initiative to adopt the online marketing model. Recalling China's insurance industry and the Internet's cooperation and development, has generally experienced the following three stages:

Information release phase (1997-2000). In November 1997, China's first professional website for the information management needs of the insurance market and insurance companies - China Insurance Information Network officially opened, opening up the intimate contact between insurance and the Internet. However, due to the immaturity of the Internet and e-commerce market as a whole, consumers and market participants lacked an understanding of Internet insurance. Insurance companies mainly used the Internet to carry out brand promotion, product introduction and business consultation.

Channel exploration phase (2000-2011). Some insurers try to gain access to the Internet and enter into transactions in various ways through the Internet as a new sales channel and service channel through the official website or through the portal's premium calculator, as well as follow-up services such as policy inquiries and claims settlement. For example, in August 2000, Ping An Insurance PA18 came into being, setting individualized functions such as securities, insurance, banking and personal finance in one and created a precedent in China. The combination of the Internet and insurance at this stage is mainly reflected in the fact that the Internet has helped insurers move "business to the Internet" and provide technical support to insurance agencies. There has not been any real internet insurance business.

Innovation and development stage (2011 to date). Insurance and Internet began to explore the depth of integration. Internet insurance has really entered the stage of innovation and development, embodied in the following two aspects: On the one hand, the insurance industry has developed innovative products based on the real needs of the Internet economy and provided risk protection for the Internet economy, such as online shopping return shipping insurance, specifically for Taobao The seller provides a performance bond "Public Music Paul" and medical insurance "Music Industry Paul" and so on. On the other hand, the insurance industry uses Internet technology to provide more accurate insurance sales, improve the customer experience and enhance the service capabilities of the industry. For example, flight delay insurance simplifies the claims process of traditional insurance and optimizes consumer experience. At this stage, some insurance groups began to explore the layout of the Internet field, Ping An and CPIC. Since 2011, Life Insurance Group has successively established the group's internal e-commerce subsidiaries. In September 2013, Zhong An Online, the first professional Internet insurance company with major shareholders such as "Ali, Tencent and Ping An", was approved by the CIRC. Zhong An is the first country in the world that does not have branch offices and operates across regions Sex insurance companies, its establishment marked the entry of China's Internet insurance franchise phase.

At present, the insurance industry has taken the opportunity of Internet finance to emerge into a round of "comprehensive development period" and the "Internet insurance" with network sales as its core. Under the wave of new technology applications, the insurance industry has rapidly grown into an innovative sub-industry and presented a market The main body of the centralized access, the rapid expansion of business scale and other characteristics: From 2011 to 2013, the number of companies operating Internet insurance business increased from 28 to 76, the premium of 2013 amounted to 31.79 billion yuan, an increase of nearly 10 times over 2011.

Of course, compared with the traditional insurance, the current Internet insurance market share is still small, less than 2% of the scale of the industry's total premiums, the products are mainly small and dispersed businesses, the average low premium, wide audience, with inclusive financial features In a certain sense, it has filled in the blank of traditional insurance coverage. Therefore, it can be said that mutual promotion and common development of Internet insurance and traditional insurance are an integral part of the insurance industry in providing multi-level risk protection for economic development. It is also an important part of the insurance industry's implementation of the "Third Plenary Session of the 18th CPC Central Committee, , Enrich the level of financial markets and products, "the specific embodiment.

Internet and traditional insurance: integration rather than subversion

The rise of Internet finance has injected new vitality into the financial industry and the Internet industry. After the integration with the Internet industry, the insurance industry has also shown a new development trend. Judging from the current situation, the relationship between the Internet and traditional insurance is more reflected in the integration rather than the impact or subversion. The Internet has added vitality to the traditional insurance industry and infused new elements. Specifically, internet insurance will have the following opportunities in serving economic and social development and providing risk protection:

First of all, broaden the space for industry development and provide risk protection for the Internet economy. The rapid development of the Internet and mobile Internet affects everyone. This new change has also created new opportunities and space for the development of the insurance industry. In recent years, the industry has taken the occasion to tap and satisfy the new insurance needs arising from the Internet era and provide risk protection for the Internet economy. For example, based on Taobao shopping development of the return shipping insurance, each single premium as low as a few cents, which in the traditional insurance field is unimaginable. In the traditional case of insurance, a few cents even the cost of policy is difficult to cover. But in the Internet age has become possible, a few cents to enjoy a dozen yuan of risk protection, to make up for the buyer's shipping costs, to fill the gaps in logistics support. Last year, double 11, return shipping insurance, single-day turnover of over 150 million single, nearly 90 million premium income, the insurance industry has created the same type of insurance single-day record of the number of transactions. In another example, some insurance companies, in cooperation with third-party travel e-commerce platforms, have developed hotel cancellation insurance and ticket cancellation insurance to meet the insurance needs of consumers based on the Internet economy and broaden the industry's development space.

Second, improve the industry risk pricing and risk management capabilities. Big data applications based on the Internet age can support the risk subdivision of the insurance industry to provide more accurate insurance pricing and improve the industry risk identification and management capabilities. Large amounts of data and processing power, product design, innovation, launch capabilities greatly enhanced. For example, the main risk facing agricultural insurance in our country is meteorological disasters. In the future, insurance companies can use various meteorological big data analysis tools to refine the risk pricing of natural disasters and provide more risk compensation for farmers' disaster damage.

Once again, the sales model has been promoted to achieve accurate marketing. Traditional insurance rely on sea tactics, customer targets, time is difficult to grasp, and inefficient. And based on Internet technology, the industry can accurately predict the consumer's purchase and service needs, and realize accurate "scene marketing". For example, consumers can order short-term accidental health insurance accurately based on the purchase behavior of air tickets. This triggered by sales and service needs of customers behavior, can effectively avoid the sale of nuisance, mandatory marketing and other issues, and effectively improve the customer experience.

Finally, enhance the level of industry customer service. With the development of Internet technology, consumers can break through the limitation of time and space, receive online insurance, and provide convenient and efficient professional services in the whole process of claims settlement. This will optimize the user experience of insurance consumers and help improve the overall service level of the industry. Such as flight delay insurance, consumers get compensation due to flight delays, will be promptly paid to their accounts, without providing meteorological evidence, or even do not need to file a claim, compared to the traditional channels, not only simplifies the original tedious claims service process, and Improve service efficiency.

Internet insurance brings new challenges

Big data applications need to be strengthened. Although the insurance industry has actively explored big data applications, for example, in January 2014, China Insurance Information Technology Management Co., Ltd., a unified and centralized information data platform for the industry, was established. However, on the whole, the insurance industry has not built up the core competitiveness of the industry in terms of internal data accumulation, data mining and finding the value behind data.

Management norms need to be improved. At present, there are some white-hot competitions in the operation of internet insurance in insurance companies, such as compliance with regulatory boundaries, service system lag, and lack of risk control. Such as product development. Individual insurance products are contrary to the basic principles of insurance, with gambling properties, unreasonable rate determination and confusion of innovative boundaries. They are pseudo-innovation real gimmicks. Information disclosure. Some product information disclosure is not complete, not sufficient, there is weakening the nature of insurance products, mixed with the general financial products, one-sided exaggerated the rate of return, the lack of risk warning and other issues. The above problems are the drawbacks of traditional insurance in the Internet insurance on the embodiment, if not standardized, it will be possible due to the amplification effect of the Internet, the formation of regional risk. Customer service. At present, most of the Internet insurance business simply moves the offline operation and sales mode to the Internet, insufficient investment in customer service, and can not guarantee that Internet insurance consumers enjoy the same level of service as offline consumer service without landing service ", Easily lead to consumer dissatisfaction and disputes. Information security protection. Internet insurance has high reliance on the Internet, information systems and data. It faces the risk of information security and the disclosure of personal privacy.

Regulatory policies need to be improved. Internet insurance is a new thing, and its development is rapid. It is immature for us to understand and grasp its risks. It is imperative to improve the regulatory policies and improve the scientific and effective supervision of the banks according to their risk characteristics. First of all, there is still incommensurate and uncoordinated existing regulatory policies and internet insurance. For example, the Internet has broken the limitation of time and space and, by virtue of the Internet platform, has actually broken the regulatory requirement that insurance agencies should not operate across regions. Second, there is still a regulatory gap for new types of risks arising from Internet services, and regulatory policies are urgently needed to effectively prevent them. Such as information security technology standards, consumer personal information protection and more. Third, the regulatory coordination mechanism needs to be improved. Such as the individual investment products ("entertainment treasure") regulatory issues.

To sum up, our overall judgment on internet insurance is that the rapid development of internet insurance is the trend of the times and is in keeping with the trend of development of the times. On the one hand, it can expand the industry development space, improve service capabilities, promote industry restructuring and upgrading. On the other hand, Internet insurance has not changed the risk attributes of insurance business. Some emerging risks associated with it may have a superposition effect with traditional risks. We should pay attention to it, study and analyze it, further improve the regulatory system and effectively prevent risks.

Improve the Internet insurance regulatory system

There are bound to be risks involved in financial activities, Internet insurance is no exception. Internet insurance has the dual attributes of Internet and finance. Therefore, how to set up a balanced rule between the two is a challenge that the internet insurance regulation faces.

CIRC has long been concerned about internet banking supervision. In 2011, we formulated the "Measures for the Supervision of Internet Insurance Business of Insurance Agents and Brokerages." In 2013, with the operation characteristics of a professional internet insurance company, a professional internet insurance company opening standard was formulated. At present, we are pressing for drafting and formulating the internet insurance regulatory measures. We will focus on a series of key issues such as business area restrictions, product management, information disclosure, floor service and information security, and clarify the regulatory policies for Internet insurance. For supervision, what are the principles of advice:

First of all, establish an open and inclusive mindset. Compared with other financial sectors (especially crowdfunding and P2P), although Internet insurance has made breakthroughs in some areas, it has not yet formed a stable financial format. It is still in the initial stage of development and needs a more relaxed environment for development. Innovation is the breakthrough of the existing system. We must not only have an open and inclusive attitude to the new thing about Internet insurance, but also have firm conviction that the market will play a decisive role in the allocation of resources. In the early stage, some insurance companies carried out innovations in internet insurance products, channels and services. Some services to the needs of the development of the Internet economy, and some enhance the customer experience, of course, there are individual products, "Bo eyeball" gimmick. We believe that those who meet the basic principles of insurance, the real market demand, social services, social products, is a living, truly innovative products. We believe the market choice.

Second, persist in the bottom line thinking. Internet insurance is the deep integration of insurance and Internet. The original risks of traditional insurance still exist, and the new risks will gradually appear. These risks may be due to the radiation effects of the Internet, continue to enlarge, triggering systemic risk. Failure to establish a bottom-line thinking on risk prevention will have a major impact on the industry's image and market stability.

Again, stick to the basic principle of consistency. The operation of the Internet has not changed the nature of the risk of insurance. Internet insurance business regulation should be consistent with the traditional insurance business regulation to prevent regulatory arbitrage. Online regulation should keep its existing regulatory rules unchanged and appropriately extend and refine existing regulatory rules when it is necessary to reflect network characteristics.

Finally, earnestly safeguard the rights and interests of consumers. Compared with the traditional business, Internet insurance is a transaction that consumers complete independently through the Internet. Open and transparent information delivery is a core advantage of the Internet. We will refine the rules for disclosure of information on Internet insurance products and explicitly disclose the requirements on insurance responsibilities, disclosure obligations and exemption clauses to prevent misleading sales and protect the consumers' right to information and options, so as to continuously improve market transparency.

The current information technology revolution represented by mobile Internet affects everyone and promotes the change of traditional business model. It will also bring far-reaching impact and change to the entire insurance industry. Only by advancing with the times can we make great strides. We will also follow the trend, take advantage of the trend, to seize the opportunity to meet the challenge, so that Internet insurance in the open, inclusive innovation, in the norms of development.

(The author is the vice chairman of China Insurance Regulatory Commission.) This article is the keynote address by the author at the 2014 Shanghai New Finance Annual Meeting and Internet Finance Bund Summit hosted by Shanghai New Financial Research Institute recently. Please refer to the website of China Financial Forum 40 www.cf40.org.cn) (Edit Wang Zitong Ma Dongdong)