"Currently, Internet insurance technology platforms, including Waterdrop, have begun to take full advantage of digitalization to make innovative attempts to carry out critical illness insurance from product design, channels and other directions." Recently, Teng Hui, chief actuary of Water Drop Insurance, revealed in an exclusive interview with the International Finance Daily.
He pointed out that in the past two years, by the agent scale reduction, million medical insurance, Huimin insurance rise and other factors, critical illness insurance in the traditional offline agent channel sales growth is weak, the Internet platform is trying to water new "offline team sales" model, and its own has the "product customization". The Internet platform is experimenting with a new "offline team sales" model, and with its own advantage of "product customization", it may be expected to provide the industry with ideas for innovation in critical illness insurance.
In the "2020-2021 Health Insurance Product Research Report", China Life Insurance pointed out that the sales of critical illness insurance and the number of insurance agents are highly correlated. In recent years, the agent force has begun to lose a lot of people due to regulation and epidemics. Not only is it difficult to recruit high-quality talent, but it is also difficult to grow the base manpower due to the impact of emerging industries such as the courier industry and the logistics industry.
Critical illness insurance is the mainstay of the agent's product pool, and its sales have declined accordingly with the massive downsizing of the team.
"As there is some overlap between the two types of products, Million Medical and Huimin Insurance, and the existing stage of sales positioning of critical illness insurance, it has also brought about a certain impact on the sales of critical illness insurance." Teng Hui told reporters, million medical insurance since 2015 after the emergence of all the way up, to 2020, million medical insurance new policy premium income has exceeded 50 billion yuan, covering 90 million people. 2020 government-led city customized commercial medical insurance "huimin insurance" blowout, quickly swept over a hundred cities, covering residents more than 100 million times. The company's first step was to create a new product that would cover more than 100 million people.
In addition, from the perspective of industry development, China has gone through the early stage of the development of critical illness insurance. The total premium for critical illness insurance has grown by an annual average of more than 40% from 2016 to 2018. After years of vigorous development, critical illness insurance has developed into a mature product, and the dividends brought by new products when they first entered the market have basically been realized.
Teng Hui also analyzed several reasons why the critical illness insurance market has been blocked from the perspective of market demand: on the one hand, affected by factors such as epidemics, the public's willingness to buy non-thirsty consumer goods such as insurance may be decreasing. On the other hand, critical illness insurance, especially long-term critical illness insurance in terms of the absolute amount of the price, relative to the million medical insurance is high, which leads to only after a certain level of income level of the customer base will consider purchasing critical illness insurance, and price-sensitive customer base will choose to buy the absolute price of the lower million medical insurance.
According to Teng Hui's judgment, in the future, with the further expansion of the scale of low-priced and high-coverage medical insurance products such as "Million Dollar Healthcare" and "Huimin Insurance", as well as the emergence of more innovative medical insurance products, the center of gravity insurance sales will gradually shift to the "youth end of the income loss". The focus of critical illness insurance sales will gradually shift to the functions of "loss of income at the young end" and "compensation for care costs at the old end", while the function of "reimbursement of high medical costs" will return to its roots and be undertaken by mainstream medical insurance.
Post-80s and post-90s, as the main consumers of insurance products, are younger, more knowledgeable, and have a higher demand for professionalism in insurance sales, which makes it more difficult for insurance salespeople to reach new customers.
Critical illness insurance in the traditional agent channel sales growth is weak, digital transformation may bring new opportunities.
At the end of 2021, the Insurance Association of China issued the Insurance Technology "14th Five-Year Plan", and at the beginning of 2022, the CBIRC issued the "Guiding Opinions on the Digital Transformation of the Banking and Insurance Industry", all of which point to the positive significance of the insurance industry to promote the digitalization of the development of digitalization under the wave of digital development. The insurance industry will also usher in digital innovation in the sales model, product form, risk prevention, eco-services and other dimensions, which will further increase the degree of user coverage to improve the service experience.
Teng Hui said that with the accelerated progress of insurance digitization, the information barriers of insurance commodities have been broken, and consumers can go online to check and compare whether the products are worth purchasing, the decision-making time before taking out a policy is significantly longer, and the Internet insurance platform has the advantage of being closer to the purchasing habits of 80, 90 young customers.
"The Internet platform is currently testing a new 'offline team sales' model, as well as its own 'product customization' advantage, or is expected to give the industry some ideas for innovation in critical illness insurance. " According to Teng Hui, many recent Internet insurance technology platforms, including water droplets, have begun to recruit offline brokers to carry out "online, offline integration" business model.
He believes that, compared to the traditional insurance company offline agent team "pyramid" hierarchical structure, these new models have fewer management levels, management is flatter, the bottom of the sales staff sales of critical illness policy can get higher commission income. At the same time, the Internet platform through the flow of customers, the accumulation of a large number of stock customer resources, the new model than the traditional offline agent channels rely solely on personal "humane single" and "strangers to show business" way more promising.
"At the same time, the online insurance platform is closer to the customer, through the intelligent big data on the depth of the interpretation of user needs, you can take advantage of the platform to customize cost-effective Internet-exclusive critical illness products." Teng Hui bluntly said that compared with the existing offline main critical illness products, the current online critical illness insurance products are more cost-effective, and long-term/short-term critical illness insurance products are available, more choices.
He also revealed that the Internet platform is trying to modularize the traditional complexity of the critical illness insurance product form, customers can follow their own needs and flexible combination. In addition, the Internet critical illness insurance products can reach some of the traditional critical illness insurance does not cover the crowd, price-sensitive, the pursuit of cost-effective young people group customers more attractive.
The reporter noted that since the new definition of critical illness and the implementation of the new Internet regulations, both the Internet-only critical illness insurance products have been on-line, or offline sales of new critical illness insurance products, and the implementation of the new regulations before the implementation of there is not much difference, but only from the rules of the insurance, health information or the responsibility of the details of the protection (such as the proportion of the benefit, the interval between the benefit, etc.) to upgrade and iteration.
In addition, both the regulation, insurance companies and reinsurance, the future trend of the deterioration of the incidence of critical illnesses are conservative attitude, and the possibility of reappearance of the previous Netflix critical illness price war is unlikely.
The first direction is to upgrade the product liability iteration in small steps. At present, the price of critical illnesses has been close to the bottom line of the price of the industry, but some of the radical insurance companies in order to sales pressure will still try in the framework of the existing critical illness product form, part of the characteristics of the responsibility of the iterative upgrading. For example, the malignant tumor additional benefits responsibility, from the existing mainstream of the second and third payment, began to try to "unlimited benefits, each time the interval of three years," the new attempt.
These practices are a boon to customers, but a big challenge for insurance companies and reinsurers.
There are also some platforms that modularize and split the liability of existing critical illness insurance products to try some short-term, clear liability critical illness insurance products, which are more flexible and can be sold separately or as a form of additional insurance. For example, the recent "mini version of critical illness insurance" on the water droplet insurance on-line, that is, focusing on the responsibility of critical illness protection, the insurance terms and conditions of the extremely simplified processing, reduce the threshold of the purchase of insurance at the same time, but also significantly reduce the premium, so far, it seems that the user acceptance of the better.
The second direction is to develop products for the sub-standard customer base. At present, the main heavy disease products of various channels, customers still need to go through a series of strict risk assessment, physical examination and health notification before they can successfully purchase. This makes it difficult for a large number of people with chronic illnesses and sub-healthy health conditions to purchase a critical illness product that matches their needs.
In the future, it is worth exploring whether the underwriting rules for this non-healthy population should be appropriately liberalized, or whether we should develop critical illness insurance products for specific illnesses that have a stable incidence rate and manageable treatment costs.
The third direction is to cover both ends of the spectrum. The main audience of traditional critical illness insurance is concentrated in the middle-aged group, and in the future, the strategy of critical illness insurance products will be extended to the "loss of income after the illness of young people" and "compensation for long-term care costs of the elderly.
Subsequently, insurers can develop more cost-effective term critical illnesses for old customers or young new customers who have limited income and value cost-effective purchases; or develop more leveraged long-term care insurance to guide middle-aged and young customers to purchase in advance, all of which are non-potential directions.
Although sales of critical illness insurance have been sluggish in the last two years, its position as the absolute protagonist in China's health insurance product system remains unshakeable.
The critical illness insurance market experienced high growth in 2017 and 2018, and from 2019 onwards, influenced by external environmental factors such as the new crown epidemic and the agent's "emptying the void", the growth rate of new policy premiums for critical illness insurance began to turn negative. But from the industry's latest statistics, as of the end of 2021, critical illness insurance still accounts for about 60% of the industry's total health insurance premiums.
Teng Hui analyzed that there are two main reasons why critical illness insurance has been able to maintain market vitality in China for nearly 30 years.
From the macro level, in recent years, China's residents continue to raise awareness of insurance and income levels continue to grow, as well as the Banking and Insurance Regulatory Commission continues to guide the insurance industry to "return to the protection" of the policy guidance, to promote the continuous development of critical illness insurance is an important driver.
In 2017, the former CIRC issued the "Notice on Regulating the Product Development and Design Behavior of Life Insurance Companies" (No. 134), which requires that "the first survivor's benefit payment for two full and annuity insurance products should be made after the policy has been in force for five years, and the annual percentage of the benefit payment or partial payment should not be more than 20% of the paid premiums". "The first step is to make sure that you are able to get the most out of your insurance policy, and that you are able to get the most out of your insurance policy, and that you are able to get the most out of your insurance policy.
At the micro level, critical illness insurance is the only product that can satisfy the different interests of insurers, salespeople and consumers at the same time, and this is the fundamental reason why critical illness insurance can maintain its vitality in China's insurance market for a long time.
For insurance companies, compared to other types of insurance products, such as annuities and medical insurance, critical illness insurance has a high new business value ratio, which can contribute more profits and bring more long-term and stable cash flow to the company.
For salespeople, Critical Illness Insurance has higher average premiums, especially for the mainstream products such as Capital Return Critical Illness and Whole Life + Whole Life Critical Illness, which are easier for agents to understand and sell. At the same time, the higher sales commission of critical illness insurance can also bring more substantial income to the agents.
For customers, the current mainstream product combination of "long-term/whole life critical illness" + "whole life/whole life insurance" not only meets consumers' demands for protection against various risks such as illness, death, and old age, but also allows customers to flexibly choose between two whole life insurance policies according to their actual situation. In addition, according to the actual situation of customers, they can flexibly choose whole life or whole life insurance products, thus forming a comprehensive insurance product protection plan, which to a certain extent takes into account the needs of consumers' wealth savings.
This article is from the International Finance Bureau
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