Zhongcheng Insurance tripled its net profit of nearly 50 million in 2019, and it is still difficult to control the cost of auto insurance
Source | Blue Whale insurance
Author | Blue Whale insurance
Original title | Zhongcheng Insurance tripled its net profit of nearly 50 million in 2019, but it is still difficult to control the cost of auto insurance. The underwriting loss exceeds 60 million
Recently, Zhongcheng Insurance (835987), a listed company on the New Third Board, disclosed its 2019 annual report, opening the prelude to the disclosure of the annual report of unlisted insurance companies. In 2019, Zhongcheng Insurance achieved an increase of nearly 20% in premium income, and after the first profit in 2018, it achieved an increase in net profit with a year-on-year increase of 318.5%. Both premiums and net profit went up, thanks to the addition of branches, increased investment yields, and the acquisition of Guangai Insurance Brokers to integrate the auto insurance industry chain. At present, the extended insurance business promoted by Guangai Insurance Brokers has contributed significantly to Zhongcheng Insurance ’s revenue growth. The industry pointed out that the current extended insurance market is small in scale, relying on the advantages of shareholders GAC Group, and the extended insurance business of Guangai Insurance Brokers has its own The peculiarity of is the extension of the industrial chain under the condition of having a professional foundation.
From the perspective of the main business, Zhongcheng Insurance will take actions such as adding branches, strengthening cooperation, and optimizing user experience around the auto insurance business in 2019, but the overall cost rate is still rising. The industry pointed out that the price transparency of auto insurance is a natural attribute and profit space Limited, insurance institutions provide extended services to find new profit points. In addition, it is worth mentioning that Zhongcheng Life Insurance Co., Ltd., which is established by Zhongcheng Insurance, has not been approved for construction. Its purpose of better serving automotive customers and supporting the development of the automotive industry chain is difficult to achieve, and how to further transform users and channels, Digging up demand points is also a long-term consideration for Zhongcheng Insurance.
Zhongcheng Insurance tripled its net profit of nearly 50 million in 2019, and it is still difficult to control the auto insurance cost. The underwriting loss exceeded 60 million. The
premium and net profit both went up.
Zhongcheng Insurance tripled its net profit of nearly 50 million in 2019, and it is still difficult to control the auto insurance cost. The underwriting loss exceeds 60 million.
First, let's look at the performance of Zhongcheng Insurance in 2019. In 2019, Zhongcheng Insurance achieved premium income of 1.786 billion yuan, an increase of 19.82% year-on-year; operating income of 1.898 billion yuan, an increase of 10.99% year-on-year.
Zhongcheng Insurance said in the announcement that the increase in premium income and revenue was mainly due to the revenue contribution from the expansion of branches, the business improvement brought by the development of non-auto insurance business around the automotive industry chain, and the subsidiary Guangai Insurance Brokerage extended business growth.
The net profit attributable to shareholders of the listed company achieved 49.57 million yuan, which was the continuation of its profit after the first profit of 11.8451 million yuan in 2018, a year-on-year increase of 318.5%; the increase in non-net profit deduction was more obvious, from 134.76 in 2018 Ten thousand yuan, increased to 29.788 million yuan in 2019, an increase of 2110.44% year-on-year. In 2017, Zhongcheng Insurance still had a net loss of 42.97 million yuan.
Regarding the expansion of profit, Zhongcheng Insurance believes that it is based on the optimization of business structure, the enhancement of operating cost control, the increase of investment return rate, and the acquisition of Guangai Insurance Brokers to integrate the resources of the auto insurance industry chain to drive profit growth.
In fact, 2019 is particularly critical for Zhongcheng Insurance. On April 12, Zhongcheng Insurance issued a further 767.6 million shares for circulation on the New Third Board, and its registered capital was raised to 2.268875 billion yuan. In the context of difficulties in raising funds for a large number of new third board institutions, and even delisting, the success of fund raising is also recognition of Zhongcheng Insurance's current operations.
Another important action is the subscription of Guangai Insurance Brokers. In June 2019, Zhongcheng Insurance completed the acquisition of the 50.2% equity of the latter, which was regarded as one of the important strategic investment layouts. The expansion of new business channels and cooperative users in the extended insurance business area of Guangai Insurance Brokers has enabled Zhongcheng Insurance to increase the scale and penetration rate of extended insurance businesses, while optimizing the insurance brokerage business related to the upstream and downstream automotive industry chains.
"The extended car insurance business is mainly provided to consumers in the form of insurance or commercial services. The characteristic is that the market size is very small, the current market is less than 10% of auto insurance, and it is more professional. It needs to rely on the OEM in terms of maintenance technology. Data modeling and pricing depend on professional guarantee companies, "Xu Yuchen, a founding member of the China Actuary Association, analyzed to Blue Whale Insurance," based on the advantages of the shareholder GAC Group in the automotive field, the layout of Guangai Insurance Brokers under Zhongcheng Insurance The extended warranty business has its own particularity and is an extension of the industrial chain under the conditions of its own professional foundation. "
"It is an inertia of consumer preference to extend the service to subsequent repairs and maintenance around the theme of automobiles, and in scenarios such as 4s stores, it is also where service providers can better refine the commonality of user needs", at the new station According to Guo Tingli, general manager of the insurance network, there is a certain potential and space for the development of the extended warranty business.
Zhongcheng Insurance tripled its net profit of nearly 50 million in 2019, and it is still difficult to control the cost of auto insurance
Optimizing the main business of auto insurance is still difficult to control costs, Zhongcheng Life is still to be approved
Zhongcheng Insurance tripled its net profit of nearly 50 million in 2019, and it is still difficult to control the cost of underwriting auto insurance. The loss of over 60 million
returned to the main business of Zhongcheng Insurance. Since its establishment, relying on the advantages of Guangzhou Automobile Group, Zhongcheng Insurance has always focused on auto insurance business. Deep plowing. In 2019, Zhongcheng Insurance optimizes its auto insurance business, on the one hand, it is to expand the scale of premiums. In June 2019, Zhongcheng Insurance Henan Branch opened, and in October, Chongqing Branch opened. The marketing network extended to the central region and was established in In mature regions of branches, we cooperate with Guangzhou Automobile brand sales stores, and the cooperation rate is currently 76%.
On the other hand, through joint renewal, professional training, and customer experience improvement, the renewal rate was increased to 47%. Among them, in order to improve the user experience, Zhongcheng Insurance launched Trumpchi brand insurance in 2019, which enhances the customer experience through brand-specific insurance products and drives the growth of car sales; at the same time, it implements "minimal service" to simplify the online service process. The average processing time of auto insurance reports decreased by 15.5% year-on-year.
Recently, Du Zhijian, Secretary of Zhongcheng Insurance Party Committee, proposed that four key projects will be promoted this year: joint OEM launch of brand insurance; the use of blockchain technology to build a car insurance mutual assistance platform; the development of fertile soil in Guangdong, Hong Kong and Macau Greater Bay Area, and the introduction of strategic investors , Gradually integrate with the international standards; establish the Auto Insurance Research Institute to promote the innovative application of the Internet of Vehicles in insurance.
The optimization actions continue to advance, but as Zhongcheng Insurance, which has been plowing for many years in the auto insurance field and is backed by GAC Group's unique advantages, although the overall profit expansion in 2019, the auto insurance business is still in a dilemma of underwriting losses. In 2019, Zhongcheng Insurance's auto insurance premium income reached 1.567 billion yuan, accounting for 85% of the total premium income, an underwriting loss of 61.05 million yuan, and a comprehensive cost rate of 104.66%, an increase of about 2.5 percentage points from the same period last year.
"Auto insurance is a rigid demand product, and the price transparency is extremely high, so the profit margin will not be too high. This is an innate attribute. If the insurance company raises the auto insurance price, it may mean that the market is limited." Guo Tingli proposed , "Now many insurance companies maintain a relatively sober understanding, more extended services, such as extended warranty business, or insurance protection business around customers' other property, looking for new profit points."
In fact, in addition to car insurance, Zhongcheng Insurance is also laying out liability insurance, health insurance, accidental injury insurance, corporate property insurance, etc. It is worth noting that health insurance and accidental insurance also face high cost issues, including health The comprehensive cost ratio of insurance reached 199.17%, and that of accident insurance was 143.21%, both increased from 2018.
In this regard, Xu Yuchen analyzed and said, "Behind the comprehensive cost rate involves the loss rate and expense rate. When the loss rate is high, it is necessary to determine whether the insurance company can reduce the loss rate through effective risk control."
"The insurance company ’s business layout is a comprehensive issue, involving multiple considerations such as talent matching and operating geographical scope. The start-up time and layout scale of each of its businesses are different. The key consideration should be the adjustment trend of the comprehensive cost rate. Whether it can achieve continuous optimization ", Guo Tingli reminded. It is necessary to further observe how Zhongcheng Insurance further develops non-auto insurance and optimizes its business structure.
In addition, Blue Whale Insurance noted that Zhongcheng Insurance's "trouble" still exists in the participation in Zhongcheng Life Insurance. In 2016, Zhongcheng Insurance plans to invest 647.6 million yuan to initiate the establishment of Zhongcheng Life Insurance, accounting for 35% of the registered capital. But so far, Zhongcheng Life has not been approved.
From the perspective of Zhongcheng Insurance, according to its introduction, the purpose of setting up Zhongcheng Life Insurance is to conform to Zhongcheng Insurance's mid- to long-term development plan, to better serve auto customers and support the development of the automotive industry chain. In fact, the advantage of Zhongcheng Insurance in establishing a life insurance company lies in the existing stock users and the automotive industry chain scenario, and the key to development lies in how to transform users, channels, and tap demand points.
In the current industry awareness, personal insurance, especially the long-term insurance field, has relatively greater profit margins. For example, for long-term insurance users, there can be more educational interaction scenarios throughout the long-term contact, which is equivalent to a In a fixed market capacity, a wider range of services can be covered.
There are not a few insurance institutions that simultaneously deploy property and life insurance. For user conversion and business support, there are certain feasibility, but there are also difficulties. From experience, property and casualty insurance companies can conduct cross-selling, but overall, life insurance customers It will be relatively easy to transfer to auto insurance business, mainly because life insurance agents can directly reach customers.
In summary, in Xu Yuchen's view, participating in Zhongcheng Life Insurance is a consideration for Zhongcheng Insurance's intention to lay out life insurance, long-term health insurance, annuity insurance and other businesses. More likely, it is the establishment of an insurance group to consider the overall layout.
