Our reporter Leng Cuihua
The Notice on Matters Related to Insurance Agency Business of Commercial Banks (hereinafter referred to as the "Notice") issued by the State Administration of Financial Supervision and Administration on May 9 has lifted the limit on the number of cooperation between bank outlets and insurance companies. Prior to this, the regulation that "each commercial bank outlet can only cooperate with no more than three insurance companies in insurance agency business in the same accounting year" has been implemented for nearly 14 years.
At the same time, the Notice also specifies the level of cooperation between banks and insurance companies, as well as the commission standard for bank agency business. Industry insiders believe that removing the "one on three" restriction on the cooperation between bank outlets and insurance companies will greatly reduce the threshold for insurance companies to reach the bancassurance channel. It will benefit small and medium-sized insurance companies in the short term and also pose greater challenges to bank insurance companies. However, in the long run, to achieve better "two-way travel" between banks and insurance companies, the quality of bancassurance business needs to be improved.
Cancel the restriction of "1 to 3"
With regard to the background of the issuance of the Notice, the State Administration of Financial Supervision and Administration said: "In recent years, with the economic and social development and changes in the external environment, all parties have called for further deepening of bancassurance cooperation, enriching the supply of insurance products and services, and meeting consumers' diversified insurance needs." Industry insiders also agreed that after the implementation of the Notice, Bancassurance products and services will be more abundant and consumers will have more choices.
The content of the Notice is not long, but it has attracted great attention from the industry, especially the cancellation of the "one to three" limit on the number of bank outlets cooperating with insurance companies.
The "one to three" restriction of bancassurance channels can be traced back to 2010 at the earliest. According to the Notice on Further Strengthening the Compliance Sales and Risk Management of the Agency Insurance Business of Commercial Banks issued by the former CBRC in November of that year, in principle, each bank outlet can only cooperate with no more than three insurance companies to sell the products of cooperative insurance companies. Since then, relevant regulatory provisions have reiterated this principle many times.
As for the impact of canceling the "one on three" restriction on bancassurance channels, Ge Yuxiang, an analyst in the non bank financial industry of Soochow Securities, analyzed the reporter of Securities Daily and said that for small and medium-sized insurance enterprises, they could gain cooperation opportunities to reach more outlets in the short term. However, under the constraint of "newspaper bank integration", small and medium-sized insurance enterprises cannot gain market share through extensive competition of cost competition, and the "product+service" model faces the test of market-oriented competition. For customers, the cost performance and attractiveness of bancassurance products are expected to improve, consumers' diversified insurance demand is expected to be activated, and the bancassurance channel industry cake is expected to grow.
At the same time, Ge Yuxiang believes that after the cooperation between banks and insurance companies is "unlimited", short-term industry competition will intensify. How can small and medium-sized insurance enterprises achieve reasonable cost sharing in the bancassurance channel to ensure that the additional cost rate is not exceeded? There is still some pressure, and the economies of scale effect will still constrain the aggressive network signing expansion of small and medium-sized insurance enterprises. In addition, under the restriction of "one to three", the outlets of large commercial banks that previously held life insurance companies often gave priority to meeting the business needs of the holding life insurance companies, to a certain extent, squeezing the resources and depth of non bank insurance companies to participate in the banking and insurance channels in the market. The Notice asked how bank insurance companies could quickly get rid of their dependence on shareholders' advantages Diversified development channels and rich product supply capacity pose challenges.
Yang Fan, general manager of Beijing Paipaiwang Insurance Agency Co., Ltd., told the Securities Daily that abolishing the "one to three" restriction would promote more diversified and flexible cooperation between banks and insurance companies, help small and medium-sized insurance enterprises to enter the banking channel, but may also increase management difficulty and market competition pressure.
The Notice again emphasized the relevant requirements of "reporting and banking in one". "The commission rate agreed in the principal-agent agreement shall not exceed the commission level of the insurance company's corporate product filing." This provision continues the principle that has been emphasized by the supervision since the third quarter of last year.
Long Ge, the co-founder and general manager of Zhongtuobang, told the reporter of Securities Daily that this regulation aims to prevent the excessive commission rate from damaging the rights and interests of consumers, and is also conducive to maintaining fair competition in the market. Others in the industry believe that strengthening the requirement of "newspaper bank integration" is to solve the problems of bank insurance channels such as charging fees and taking "tips" to promote the healthy and sustainable development of the industry.
Innovative products and services are also needed
The State Administration of Financial Supervision and Administration believes that the implementation of the Circular is conducive to giving better play to the advantages of commercial banks and insurance companies, promoting long-term in-depth cooperation between the two sides, and exploring new paths for transformation and development. In the view of insiders, to achieve the "two-way rush" of banking and insurance, we still need to constantly improve the quality of products and services.
In fact, since 2020, some insurance companies have restarted the bancassurance strategy and put forward the development strategy of "new bancassurance" against the background that the number of insurance agents has continued to decline significantly. However, since the beginning of this year, the growth of bancassurance has been sluggish again. According to the industry exchange data, in the first quarter, the new regular premium income of bancassurance of about 30 insurance enterprises included in the statistics fell by 22% year on year. In April, the new regular premium income of bancassurance fell by 40% year on year.
At the same time, from the perspective of banks' intermediate income, the statistics of Ping An Securities Bank team showed that in the first quarter, the net income of commission and commission of 42 listed banks fell 10.3% year on year. The impact of the reduction of bank premium rate and the high base in the same period were the important reasons for the negative growth of intermediate income business. Specifically, the net income of service charges and commissions of the six major banks, joint-stock banks, urban commercial banks and agricultural commercial banks decreased by 7.5%, 16.4%, 12.0% and 8.19% year on year respectively.
Therefore, insiders believe that both insurance companies and banks have the desire to further deepen cooperation and expand the business of bancassurance channels.
Yang Fan believes that to promote the "two-way rush" of banks and insurance companies, both sides need to establish a long-term and stable cooperation mechanism, establish a mutually beneficial cooperative relationship, and share business results together. At the business level, it is necessary to strengthen communication and cooperation, strengthen personnel training and professional knowledge learning, improve the professional level and service ability of sales personnel, strengthen risk management and compliance supervision, ensure the compliance of sales behavior, and protect the legitimate rights and interests of customers.
Longer believes that with the in-depth development of cooperation between banks and insurance companies, insurance companies will face greater market opportunities and challenges. In order to establish a long-term and stable cooperative relationship with commercial banks, insurance companies need to constantly innovate products and services and improve market competitiveness, which will help promote the innovation and development of the entire insurance industry. In particular, according to the Opinions of the Notice, the cooperation of banks through the Internet, telemarketing and other modes of non offline outlets may promote the banking and insurance industries to strengthen cooperation and bring new growth points to their businesses.
