China's auto insurance market undergoes major reforms
Comprehensive reform measures for China’s auto insurance were implemented on Saturday, with underwriters responding.
On September 3, the China Banking and Insurance Regulatory Commission officially issued the Guiding Opinions on Implementing Comprehensive Reform of Auto Insurance. This aims to give full play to the decisive role of the market in the allocation of auto insurance resources, better the government's role, and minimize direct supervision.
The reforms include both commercial auto insurance and compulsory traffic insurance.
Of note, the total liability limit for compulsory traffic insurance will be increased from 122,000 yuan (US$18,027) to 200,000 yuan, of which the death and disability compensation limit will rise from 110,000 yuan to 180,000 yuan.
In response to the reform, ZhongAn Online unveiled a new auto insurance product, which enables consumers to obtain more comprehensive protection and better service at lower premiums.
This product expands the insurance liability, raises the compensation limit of commercial third-party liability insurance, and increases value-added services.
Car owners can enjoy preferential discounts when directly insured online, the insurer said.
With the new cover, policy holders can enjoy more comprehensive protection, including theft and robbery of the whole motor vehicle, broken glass, no deductible rate, and spontaneous combustion of the car.
In addition, Zhongan provides users with a one-stop intelligent service including online auto insurance quotation, underwriting, claims settlement and road rescue through technology empowerment.
China's auto insurance insured 260 million motor vehicles in 2019, with an insurance premium income of 818.9 billion yuan, accounting for 63 percent of the country’s property insurance premiums, industry data showed.
The segment has seen positive results after years of reform and development since 2015, but some long-standing deep-seated problems remain, such as high pricing, high handling fees and disorderly competition.