From the latest developments in the European life

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From the latest developments in the European life insurance market to see hidden behind the prosperity of our life

1.'s economy experienced a flourish after 90 years, European countries have been relaxed regulation of the life insurance industry. Focus on the performance of financial regulatory authorities in the UK life insurance companies in the UK corporate bonds and increase the proportion of stock market did not take any measures. Many UK life insurance company for the false prosperity of the American Enterprise confused, has increased U.S. investment in corporate bonds and the proportion of the stock market, and regulatory authorities in the immediate high return on investment and development needs of the UK under the slogan of the insurance, the solvency of insurance companies and capital adequacy have been relaxed alertness.
Therefore, in the Enron, WorldCom incident, a British insurance company investment losses of up to nearly 70 million pounds, once a cash flow and capital shortage.
2. Secondly, the European insurance companies in the mix on the expansion of industry and the scale of operation too. 1996 to 2001, the European insurance company mergers as high as several hundred. Many of whom are well-known cross-industry mergers and Germany's Allianz Dresdner Bank of Germany and Germany, the UK business mergers and Norwich Union Insurance, Winterthur, Credit Suisse merger and other merger with billions of dollars every turn case. European insurance companies that in the period of economic expansion and rapid development, diversification helps reduce costs, increase sales, reduce risks. And precisely the same time, diversified capital market and insurance will also be risks to expand business several times, and even hundreds of times, cross-industry mergers and bring more business to the new business performance and profits, but also brought greater risk. Such as Allianz Dresdner Bank in the merger and found that the risk of banks Allianz is a new topic. Allianz had to use its own funds to make up for losses in banks, which led to its own capital, credit rating was lowered down.
3. Furthermore, most of Europe from the early 70's Life Insurance Company launched investment connections oriented insurance, investment products, the advantages of even Needless to say, and its stability in the business often depends on the insurance company's investment in capital markets, the success or not. In the European capital market, especially when the stock market is thriving, stable investment with a good product, but a downturn in the stock market, the surrender rate was higher volatile business. European insurance consumer confidence hit. This is not only the insurance company's current dilemma facing the business, but also seriously inhibit the potential of the insurance consumer demand, the development of the entire insurance industry lay hidden. At the same time, a major investor in the European life insurance industry - institutional investors, especially pension funds for government investment in insurance companies decline sharply. life insurance companies have to reduce investment. Following the 2002 Moody's credit rating company August 27, 2002 published report said: prompt.
and the Life Insurance Industry in 2002 and a boom. According to the China Insurance Regulatory Commission announced: China's insurance industry between January to June 2002, premium income of 1,613.3 billion yuan, up 57.7%, accounting for 73.61% of which life insurance. However, also hidden behind the prosperity of deep crisis. Book profit of life insurance in 2002 is 5.98 million, a decrease of 584 million yuan, down 49%. And profits caused by increased premium income decreased mainly due to an increase of claims and payments 7.364 billion yuan, an increase of 79.17%, in addition, the company's 67.45% growth in operating expenses, fees and commissions 28.92% 212.99%, respectively, a relatively large growth.
in premiums and substantial increase in operating expenses, while investment income of insurance companies significantly reduced compared to last year. The end of June 2002, the balance of the insurance companies 477.6 billion yuan of funds, increased 107.3 billion yuan over the previous year, an increase of 28.99%. First half of the funds realized gains 8.257 billion yuan, an average balance of funds is 423.944 billion yuan, asset utilization rate of return of 1.95%, down more than 1.03 percentage points over the same period last year. (China Insurance News 22 August 4th Edition).
significant growth of premium income, in particular the significant increase in investment class of insurance may not be a happy thing to January-June 2002, the largest city in China's insurance increase - Beijing, the city's premium income reached 83.8 billion, the highest in history, an increase of 76.87%. But the premium structure has undergone great changes, dividends, investment and other new connections and universal life insurance premium income increased by investment category is the total premium income of the main body, accounting for 80% of total business, while the proportion was 38.5 last year %, the investment class of insurance premium structure in an absolute weight. (China Insurance News July 24 version 1)
for traditional life insurance, if the investment income is lower than the interest rate policy book will be a direct result of the new poor profit loss; for investment-type life insurance is concerned, that the insurance companies a large extent on the investment risk to policy holders that is naive, because once the insurance company investment income decline, the insurance will be seriously hurt consumer confidence, a lot of surrender is inevitable. This not only makes the existing insurance companies run into financial difficulties, and it will greatly hurt the insurance consumer confidence, the Chinese insurance industry are not properly developed.
end, we must clearly understand the status of development and prosperity of life behind the hidden dangers. Examine the situation of China's insurance industry is not difficult to see the Life Insurance industry faces some challenges. One
risks: investment risk
in China's stock market downturn this year, the insurance companies to invest in the original area of relatively high risk of large amount of capital within the limited turn into low-risk bonds, bank deposits and bond markets. Given the underdevelopment of China's current bond market, and increased risk of banks in recent years, too much money chasing limited investment products, will inevitably lead to decline in the rate of investment income, insurance funds into low-risk area of investment led to excess liquidity. February 21 this year, central bank interest rate adjustment after the agreement on the market deposit rates of around 5% from last year's 3.6% decline in the current; long-term bond rates remained low, the bond market, the 10-year bond coupon rate from 3% to 2.5 %, the repurchase rate from 3.3% to 2.4%. At the same time, the insurance companies to invest in stock funds,[link widoczny dla zalogowanych], the sharp fall of 19.07% from the same period last year dropped to the current 0.39%. (China Insurance News 22 August 4th Edition) Clearly, if capital markets do not introduce new, high-return products, rate of return on investment of insurance funds would be in a very long period of time hovering within a low level. In this context, while traditional life insurance products of the original favorable loss difference will further increase, on the other hand, the low return on investment class of insurance will not be conducive to the development of sound insurance industry. Once the capital market because of high return investment channels, the wave of profit-driven behavior will lead to surrender.
hidden two:
surrender rate and operational risks, according to the surrender rate of 4.9% year on year increase of 4.8 percentage points.
previous years, many insurance companies in China launch investment class of insurance products, their own lack of preparation management, marketing staff without adequate training, product promotion is not enough, consumers do not know much investment class of insurance products, leading to individual Members of the insurance company marketing insurance products exaggerate the rate of return on investment to mislead consumers, which led to consumer complaints and collective demands surrender occur. Had a lot of media coverage. Many insurance companies in weighing the interests of the company's brand and consumers often have to pay higher than the actual account value, in exchange for the consumer's confidence in their companies. However, in the surrender rate is low, the insurance company still capable of life support. Once the capital market investment income sharp decline in big area of surrender, the insurance company to pay large amounts of cash to meet the one hand, surrender, on the other hand, due to the sharp shortage of funds, investment income decreased substantially and the withdrawal will lead to more Paul. The insurance company's operating risk is self-evident.
hidden three: the operating costs of the insurance risk
class consumers to buy insurance products, whether dividends dividends dividends and how much depends on the one hand, the success of the insurance companies to invest in the other hand, depends on the insurance companies No effective control of their operating costs. January to June this year, China's life insurance operating expenses, fees and commissions were up over last year 67.45%, 212.99% and 28.92%. The one hand, China's insurance industry in the next few years, investment returns will hover at a very low level, on the other hand the insurance operating costs had increased sharply. In this environment, excessive business investment class of insurance products, rather than on the insurance business within the company level, will inevitably lead to the actual dividends and the expected difference between the insurance consumer psychology, and once this difference to a certain degree of accumulation or capital market a sign of trouble, will inevitably lead to policy holders surrender, will the insurance company may cause public loss of confidence.
hidden four: agents and industry and professional agents
of risk Mixed or cross-industry mergers in Europe the consequences, then this idea is totally unacceptable.
legally we have to exclude the possibility of mixed operation, but the actual situation is more or less we have various insurance companies and banks, securities, professional agent to sign a variety of forms of cooperation agreement. And 1-6 in 2002, Bank of Beijing life insurance agent of 17.3 billion yuan, the total life premium income of the city's 21%. These agents and industry and professional behind the rapid growth of agency business, we should clearly see that the banks hidden behind the proxy: the central bank cut interest rates and are subject to many residents of personal savings interest tax, savers choose to buy insurance in the majority of people all because of high interest deposit after the expiration of a few years ago, can not select the appropriate investment channels, and then select the insurance. Therefore, the real motive of their insurance policies is not clear. Consumers choose to buy insurance is to avoid tax on interest, seeking high returns, profit-driven behavior is not a very good understanding of the insurance. Combined with agents and industry personnel in all the time when the policy induced risk of such purchase are obvious: bank savings interest rates low, savers have put money into the investment class of insurance; bank savings when interest rates rise, some depositors will surrender.
professional agent: Many agents in pursuit of high returns Jiezeeryu short period of time. On the surface a number of professional agencies from January to June 2002, premium income rose sharply, a piece of prosperity. And careful analysis, professional agents in the categories of products like cross-investment ratio is very alarming. For insurance companies, if the market development period, large and do like to pay special business, the market is undoubtedly over-exploitation of resources, when this level reaches a certain size, the future market development will be a partial drying cycle.
As noted above, the rapid development of China's insurance industry, but also a lot of hidden risks. Analysis of the European insurance market, the problems arising now, study the causes of inspiration to us all, but also gives us a proactive requirements. China's life insurance industry should also calm down and carefully examine how the current regulations permit, the investment of insurance funds to be both safe and profitable levels of employees, agents, quality, how to develop the market and other topics, really make the development of China's insurance industry is in a virtuous cycle, and greater development for the future and lay a solid foundation, which is the sincere wish of the author.