On May 9, the State Financial Supervision and Administration issued the Circular on matters related to the Insurance Business of Commercial Banks (hereinafter referred to as "the Circular"). According to the notice, commercial banks act as agents for all kinds of insurance business, branches and outlets at all levels do not limit the number of cooperative insurance companies, and first-class branches can sign agreements directly after being authorized by a legal person.
This also means that the limit of no more than three banks cooperating with insurance companies will be lifted, and a single network is expected to sell more insurance companies' products. To promote the "integration of newspapers and banks" of the bancassurance channel, this is undoubtedly a "big loosening".
In 2010, in order to rectify the chaos of the bancassurance channel, the former CBRC suspended the sale of bancassurance stationing points and limited each bank network to the products of no more than three insurance companies. In 2019, the former Bancassurance Regulatory Commission also reiterated the "1-3" requirements for Internet and e-sales business.
Soochow Securities analysis, liberalize the "1-3" cooperation network restrictions, a clear market-oriented, short-term will greatly enrich banking and insurance products and services, long-term bancassurance industry cake. Soochow Securities expects that after the release of "1-3" cooperation restrictions, small and medium-sized insurance companies can get more cooperation opportunities to reach more outlets in the short term, and channel competition will intensify. However, it needs to be emphasized that under the constraint of "the integration of newspaper and bank", small and medium-sized companies are unable to obtain market share through extensive competition, and their products and services are facing the test of market-oriented competition.
Unbind the cooperation between banks and insurance
"although it is only 390 words, the impact on the industry is not small." After the "notice" was issued, some insurance practitioners expressed emotion. The notice said that commercial banks act as agents for Internet insurance business, telephone sales insurance business and itsDealdrawvideopokerHis insurance business, branches and outlets at all levels do not limit the number of cooperative insurance companies. In addition, the notice also defines the standards for cooperation between banks and insurers. At the level of cooperation, the notice requires insurance companies to cooperate with commercial banks, and in principle, a written principal-agent agreement should be signed by the legal entities of both parties. If it is really necessary for the first-level branch to sign a principal-agent agreement, the first-level branch shall obtain the written authorization of its legal person in advance.
In terms of the interests of bancassurance cooperation, the notice defines the commission standard for bank agency business, that is, the commission rate stipulated in the principal-agent agreement shall not exceed the commission level for the product filing of the legal body of the insurance company.
This is also a reaffirmation of the previous policy of "unity of newspaper and bank". "the integration of newspaper and bank" refers to the product pricing assumptions used by insurance companies in submitting product approval or filing materials to the regulatory authorities, which should be consistent with the behavior of insurance companies in the actual business process.
The State Administration of Financial Supervision and Administration said that the implementation of the notice will help give better play to the advantages of commercial banks and insurance companies, promote long-term and in-depth cooperation between the two sides, and explore new paths for transformation and development. it will help to broaden the scope of cooperation between commercial banks and insurance companies, and enhance the value of bank agency insurance business and consumer satisfaction. Help to enrich bank insurance products and services, better meet the diversified and multi-level protection needs of consumers, and effectively safeguard the rights and interests of consumers.
A management official of a small and medium-sized insurance company told the Economic Observer that the liberalization of the policy has brought opportunities, but also pressure. Under the constraint of "integration of newspaper and bank" on the cost side, in the face of competition from large insurance enterprises, small and medium-sized insurance enterprises will usher in more opportunities, but they will also face the challenge of additional expense rate.
According to the analysis of Soochow Securities, on the one hand, the competition in the industry will intensify in the short term after the release of "1x 3" constraints; on the other hand, under the constraints of "1x 3", the branches of large commercial banks that control life insurance enterprises often give priority to meet the business needs of holding life insurance enterprises, which to a certain extent squeeze out the resources and depth of market-oriented participation in bancassurance channels of non-bank insurance companies. The notice poses a challenge to the life insurance enterprises of the banking department, how to get rid of the dependence on the advantages of Oriental shares as soon as possible, broaden the diversified development channels and enrich the supply capacity of products. In the long run, large-scale insurance companies need to give full play to their economies of scale advantages in brand awareness, customer service depth and diversified product supply capacity under the repeated regulatory orders to "integration of newspaper and bank". We can actively explore long-term and in-depth cooperation with banks and explore new paths for transformation and development.
On August 22, 2023, the State Administration of Financial Supervision and Administration issued the Circular on standardizing Insurance products in Banking Agency channels, emphasizing that commission fees in bancassurance channels should be strictly "reported and integrated". And stipulate that the formalities and rates for bulk delivery, 3 years, 5 years and 10 years in the future are strictly limited to 3%, 9%, 14% and 18%.
At the press conference on the data and information of the banking and insurance industry in the third quarter of 2023 held on October 20, 2023, the person in charge of the life insurance supervision work of the State Administration of Financial Supervision and Administration said that so far, through full communication between insurance companies and banking institutions, the vast majority of banks engaged in bancassurance business have re-signed contracts with insurance companies in accordance with the "integration of banks". According to a preliminary estimate, the commission fee of the bancassurance channel is about 30% lower than the previous average.
It is worth noting that under the influence of "the unity of newspaper and bank", the insurance premium scale of the bancassurance channel which has made great progress in the first half of 2023 has entered a state of slow growth. The scale of bancassurance channels in the insurance industry declined at the end of 2023 and early 2024, while the net income of bank fees and commissions also declined due to factors such as the decline in income from agency insurance business.
Bank and insurance cooperation in recent years
Bancassurance channel is one of the important business sales channels for insurance companies, and its main cooperation mode is for insurance companies to obtain premium income and customer resources through bank channels. Banks sell insurance products for insurance companies based on huge customer resources and sound sales network, so as to obtain service fee and commission income and improve the allocation of customers' financial products.
In February 1996, the people's Bank of China issued the interim provisions on the Administration of Insurance agents, which defined the part-time agent system, but stipulated that only one insurance company could provide agency services. since then, the "one-to-one" cooperation mode of bancassurance has been officially opened. However, at the initial stage of the development of the insurance industry, the main products were ordinary life insurance products, which were different from the business model and customer needs of banks, so the cooperation between banks and insurance did not develop fast at that time.
The new "Insurance Law" implemented in 2003 liberalized the restriction of the "one-to-one" agency model of the bancassurance channel. Since then, the bancassurance channel has shown a momentum of rapid growth, coupled with the reduction of deposit interest rates, and insurance companies have increased the development of investment products. The scale of premiums in bancassurance channels is increasing continuously, and the premium income contributed by bancassurance channels reached 764 in 2003.Dealdrawvideopoker91 billion yuan, accounting for 25.4% of the total life insurance premium.
With the rapid growth of the premium scale of bancassurance channels, the problems of bancassurance cooperation are also frequently exposed, and regulators begin to standardize the development of bancassurance channels. In November 2010, the former CBRC issued the Circular on further strengthening the Compliance sales and risk Management of Commercial Bank Agent Insurance Business, requiring the personnel of bank outlets to sell insurance products to have the qualification of insurance agency. at the same time, it stops the insurance company personnel from stationing in the bank network to carry on the sale, and stipulates that each bank network should cooperate with no more than 3 insurance companies.
Since then, the bancassurance channel quickly entered a negative growth cycle, and by 2013, the proportion of premium income contributed by the bancassurance channel in total life insurance premiums dropped rapidly from 50% in 2010 to 36.7%. Subsequently, regulators continued to strengthen supervision of bancassurance channels, but under the influence of factors such as the growth of consumer demand, the scale of bancassurance channel premiums resumed growth in 2014, and its contribution to life insurance premiums in the insurance industry also increased to 44.1% in 2016.
In 2017, the life insurance industry ushered in a new round of strict supervision. under the background of emphasizing "insurance surnamed insurance, returning to origin", the development and sales of medium-and short-term survival products were restricted. the bancassurance channel that favors such products has been affected again, and the contribution of premium income of bancassurance channels to life insurance premiums has dropped to 30.3% in 2019.
Since 2019, the number of agents in insurance companies has gone up and down, and the development model of agent channels is facing challenges. Banks begin to pay attention to the sales of insurance products under the influence of multiple factors, such as the new regulations on capital management and the decline in income from consignment funds. Bancassurance channels have returned to the strategic layout of many large insurance companies.
One person in the insurance industry believes that for the insurance industry in transition, the significance of the bancassurance channel needs to be re-examined, that is, from the past "scale contribution" to "equal emphasis on scale and value contribution". This means that the cooperation between banks and insurance needs to explore new models.