Construction Insurance Products, Services and Reinsurance: International Market vs Domestic Market-Industrial Insurance Network
The international construction market has experienced a long period of development and change and has formed a more mature project contracting and management mode. The main body of construction activities has a strong sense of insurance protection, based on the threat of their own risks and the relevant legal provisions of the insurance requirements, for engineering insurance protection has a strong demand. At the same time, insurance companies and insurance intermediaries based on engineering insurance market demand for continuous research and development, improve engineering insurance products and insurance services, a strong impetus to the rapid development of the international engineering insurance market.
1, international engineering insurance products and services analysis
In the international construction market, construction activities generally have a strong risk management awareness, attaches great importance to the use of insurance power to fight against all kinds of project risk threat. Especially in the long process of development of the international construction market, people for all kinds of construction risks continue to deepen the cognition of the specific risk of insurance protection needs continue to improve, and gradually gave birth to a more sound and perfect engineering insurance products and innovative application of insurance services.
Engineering All Risks Insurance
Engineering All Risks Insurance, including Construction All Risks Insurance and Third Party Liability Insurance, its insurance liability includes: the project itself (permanent or temporary), construction materials, various types of engineering equipment, engineering machinery and other property during construction or installation, due to natural disasters or accidents resulting in loss compensation; and the insured shall be liable for the third party personal injury, death or property damage compensation. the insured is legally liable for the third party's personal injury, death or property damage.
The insurance coverage period of Engineering All Risks Insurance covers the period of construction and installation of the project; the subject matter of insurance includes the project itself, all kinds of construction materials, machinery and equipment and other property losses, as well as the third party's personal property losses; and the subject matter of the construction activities involved includes the owner and contractors.
Employer's Liability Insurance and Accidental Injury Insurance
Employer's Liability Insurance and Accidental Injury Insurance, both of which are centered on the compensation of accidental medical treatment, disability, or death expenses incurred by the employees due to accidental injuries, but Employer's Liability Insurance is a kind of liability insurance, which underwrites employer's liability to the employees for accidents and compensates the accidental injuries of the employees or their family members, and also exempts or reduces the employer's liability. The employer's liability insurance is a liability insurance policy that covers the employer's liability for the employee's accidental compensation.
Employer's liability insurance and personal accident insurance cover the investigation, design, construction and installation and commissioning stages of the project; the subject matter of the insurance includes the payment of medical and casualty expenses incurred by the construction personnel due to accidental injuries; and the subject matter of the construction activities involved includes the construction personnel in the investigation, design, construction, supervision and so on.
IDI Engineering Quality Potential Defects Insurance
IDI Engineering Quality Potential Defects Insurance's insurance liability includes: project works due to the design, materials and construction causes the quality does not comply with the mandatory standards of engineering and construction as well as the agreement of the contract, and in the use of the process of quality defects exposed to the repair of the compensation liability.
The insurance coverage period for potential defects in project quality covers the investigation and design phase, construction phase and operation and use phase of the project, and the maximum insurance coverage period can be up to ten years after the completion of the project. In the construction phase before the completion of the project, the engineering quality potential defects insurance mainly provides professional quality risk management services for the construction of the project; after the completion of the project, it provides repair and compensation services arising from quality defects. The construction activities involved in engineering quality potential defects insurance include the construction unit, the construction unit and the small owner.
Professional Liability Insurance
Professional Liability Insurance refers to the insurance that the insurance company will be responsible for the financial compensation for the accident caused by the negligence and fault of the relevant construction activities (survey, design and construction), which leads to the personal injury or property damage of others.
The insurance coverage period of professional liability insurance is also longer, with a maximum of 8 years under the single project insurance method and a maximum of 15 years under the annual insurance method. The insurance liability of professional liability insurance mainly centers around the material and third party liability losses caused by insurance accidents, and its purpose is to provide the risk response and compensation ability of the relevant professionals, and to ensure that the financial compensation resulting from insurance accidents can be successfully resolved.
Motor Vehicle Insurance
Motor Vehicle Insurance Plus Third Party Liability Insurance is an insurance policy that insures the insurance company to bear the corresponding financial compensation responsibility for the damages of motor vehicles with a public **** license plate in natural disasters or accidents, or for the injuries and damages to the lives and properties of the third party.
Motor vehicle insurance, like engineering insurance, also belongs to the integration of property damage insurance and liability insurance as one of the comprehensive property insurance, insurance liability includes both the motor vehicle's own loss compensation also includes the third party caused by personal injury and property damage compensation.
Construction Machinery Insurance
Construction Machinery Insurance is a kind of construction insurance that covers all kinds of construction machinery and equipments in case of natural disasters or accidents. Its additional insurance includes third-party liability insurance and employer's liability insurance, so its insurance coverage can include three parts: compensation for damage to construction machinery property, compensation for damage to third-party personal property, and compensation for accidental injury to operators.
Credit Insurance and Guarantee Insurance
Credit insurance, refers to the right person directly to the insurer, requiring the insurer to underwrite the credit of the obligor, if the right person suffers economic losses due to the obligor's failure to fulfill its obligations, the insurer must be responsible for compensation in accordance with the provisions of the insurance contract. If the contractor is worried that the business can not pay the project payment as scheduled, as the right person to the insurance company to take out credit insurance to protect the owner's credit for payment, once the owner fails to pay the project payment as scheduled, the insurance company is responsible for the contractor to compensate for the corresponding economic loss.
Guarantee insurance refers to the obligor to take out an insurance policy, the insurer as a guarantor for the obligor to provide credit guarantee, if the obligor's behavior leads to the right person suffered economic losses, in the case of the obligor can not compensate for the loss of the right person, the insurer instead of the obligor to compensate for the right person's economic losses, and has the right to recover from the obligor. If the contractor insures the insurance company, the insurance company guarantees to the owner that the contractor will fulfill its obligations according to the contract, and once the contractor fails to complete the performance according to the contract, the insurance company will be responsible for compensating the owner for the corresponding loss.
Delayed Completion Insurance
Delayed Completion Insurance mainly covers the indirect economic loss of the owner's expected profit, bank loan interest and fixed costs due to the risk factors such as natural disasters and accidents in the course of construction, which lead to the obstruction of construction and delayed completion of the project.
Delayed completion insurance is mainly in the form of additional insurance for engineering all risks, and is seldom underwritten as an independent insurance. The subject matter of the insurance is different from the traditional engineering insurance subject matter, the risk is larger, the insurance technology requirements are higher, usually equipped with more professional third-party risk management services, at the same time have professional reinsurance company support.
In addition to sound and perfect engineering insurance products, the international engineering insurance market also has a more mature development in the application of innovative insurance services. The main performance lies in the fact that insurance companies themselves or with the help of third-party professional organizations can give engineering insurance products powerful risk management service functions, such as project quality potential defects insurance project whole process quality risk management services (TIS services), credit insurance and guarantee insurance whole process performance risk management services, delayed completion insurance professional third-party risk management services, and so on.
Through the innovative research and development and wide application of risk management services of various insurance products, insurance companies are able to form a brand new insurance protection role outside of the existing project management system on the one hand, and effectively deal with the risks of project quality, construction safety, schedule and investment control; on the other hand, insurance companies are further involved in the management of the construction project with the help of professional risk management power, and play the role of market entry. Screening (insurance bond or insurance premium rate affects the construction enterprises to carry out market business), the whole process of project engineering risk management (quality, safety, schedule and investment risk management), the full range of risks after the compensation guarantee and other important roles.
2, the domestic engineering insurance market development status analysis
China since the 1980s through the World Bank loans and "three-funded" construction projects to contact the "engineering insurance" as an important means of modern risk management. In comparison, the development of the domestic engineering insurance market is relatively short, the degree of development is not sufficient, there are: uneven development of insurance, insurance coverage is narrow; the lack of innovation in insurance services, unable to further expand the value of engineering insurance; the slow development of the reinsurance market, unable to quickly drive the expansion of engineering insurance business at the direct end of the insurance.
Unbalanced development of insurance types
Compared with the international engineering insurance market, the overall development of the domestic engineering insurance market is relatively short, although the construction market has a strong demand for insurance protection against risks such as project quality, construction safety, contract performance, property protection and professional liability, the market is obviously deficient in the supply of products, and the development of various types of engineering insurance is characterized by uneven development.
Currently, the market is characterized by an uneven development of various types of engineering insurance, which is unable to form a comprehensive and effective engineering insurance protection.
At present, the domestic engineering insurance field development and application of more mature engineering insurance mainly centered on comprehensive property insurance and accidental injury insurance in two major areas, such as construction engineering all risks, installation engineering all risks, engineering machinery comprehensive insurance is almost all kinds of project construction of compulsory insurance, insurance liability includes both the engineering or machinery and equipment itself property damage compensation also includes the third party caused by personal injury and property damage compensation; again, such as construction engineering all risks, installation engineering all risks, engineering machinery comprehensive insurance is almost all kinds of project construction of compulsory insurance, insurance liability includes both engineering or machinery and equipment itself property damage compensation also includes third party caused by physical injury And property damage compensation; again, such as construction accidental injury insurance, as the first had been the "Construction Law" explicitly required to insure the project insurance, in the engineering insurance market has a relatively wide range of practical applications, many places will be regarded as a mandatory insurance, non-insurance will not be permitted to start work.
In addition to comprehensive property and casualty insurance, the domestic market development and practical application of engineering insurance such as engineering quality potential defects insurance (IDI insurance), professional liability insurance, production safety liability insurance, project guarantee insurance, delayed completion insurance are slow, uneven and inadequate. Among them, such as engineering quality potential defects insurance, engineering guarantee insurance, safety production liability insurance are new types of engineering insurance introduced and researched and developed by domestic innovation in recent years. Despite the strong policy promotion, they are still affected by the market development time, and there are some problems in market promotion and practical application. The development of professional liability insurance and delayed completion insurance is even slower.
Lack of insurance service innovation
Traditional engineering insurance services are mainly centered on the two business ports of "insurance" and "claims", and lack the necessary modern post-insurance risk management services. Due to this limitation, new types of engineering insurance such as potential defects insurance of engineering quality, production safety liability insurance, engineering guarantee insurance and delayed completion insurance are in a difficult situation when carrying out the necessary risk management services: lack of professional engineering insurance risk management service technology, talents, management and service experience, inability to provide effective risk management service support for the relevant new types of engineering insurance, which affects the rapid and full development of the domestic engineering insurance market. The lack of professional engineering insurance risk management service technology, talents, management and service experience to provide effective risk management service support for relevant new types of engineering insurance has affected the rapid and full development of domestic engineering insurance market.
In addition to the market promotion and practical application of relevant insurance types, the immature risk management services also affect the transformation and development of the traditional engineering insurance business model. At present, the business of domestic engineering insurance market is mainly carried out in a decentralized and combined insurance mode, with deficiencies in the cost of insurance processing, insurance contract management, insurance coverage and risk management services.CIP insurance (Controlled Insurance Programs) is a common mode of engineering insurance in the field of international engineering insurance, which is not a specific insurance type, but involves all phases of construction project implementation. CIP insurance (Controlled Insurance Programs) is a common engineering insurance model in the field of international engineering insurance, which is not a specific type of insurance, but a comprehensive insurance protection method involving all stages of construction projects, all participating subjects and all risk factors, which is conducive to reducing the cost of insurance processing, improving the efficiency of insurance contract management, expanding the scope of insurance coverage, and improving the risk management of projects. However, to carry out CIP insurance model objectively requires insurance companies to have their own or with the help of third-party organizations to provide professional quality and safety risk management services, which has become the main constraints on the domestic engineering insurance market to carry out CIP insurance business.
Therefore, due to the lack of necessary and effective risk management services, insurance companies always lack the business opportunities to further participate in project engineering management, and are unable to play the role of diversified insurance protection in the mature engineering insurance market.
Slow development of reinsurance market
Engineering construction activities are characterized by large investment capital, long construction period, difficult management, complex risk factors, and more risky links, etc. Therefore, the development of engineering insurance business objectively imposes high requirements on insurance companies in terms of pricing of products, underwriting and compensation, risk management, and other insurance technology and underwriting capacity, which requires reinsurance company's This requires the business support of reinsurance companies. On the one hand, the reinsurance business can effectively help the direct insurance company to diversify business risks and become an important risk management tool for the direct insurance company; on the other hand, the reinsurance company will provide all kinds of insurance technical support to the direct insurance company to help it to formulate product pricing, underwriting programs, and to provide all kinds of professional consulting services, which will improve the overall underwriting capacity and management level of the direct insurance company.
Engineering insurance is a highly specialized insurance field, and at present, there are fewer professional reinsurance companies in China, and the business development of the domestic engineering reinsurance market is slow, with a large amount of premiums flowing into the international market. This is the main reason why some special types of insurance (e.g. DSU delayed completion insurance) cannot be carried out effectively and smoothly in the current domestic engineering insurance market, as well as why the promotion and application of some new types of engineering insurance (IDI potential defects in engineering quality insurance, engineering quality guarantee insurance) is slow.?
Compare and analyze the development characteristics of the international engineering insurance market, and further accelerate and improve the development of the domestic engineering insurance market, which is an important guarantee condition for realizing the development strategy of China's construction industry internally and externally. At present, the domestic engineering insurance market in terms of products, services and reinsurance are still facing some development difficulties, to promote the transformation and development of the traditional engineering insurance market and the international market docking is still a long way to go.