What's the income from being an insurance broker?

It has been more than two years since the birth of the first insurance brokerage company in China, and eight insurance brokerage companies have been established with the approval of the China Insurance Regulatory Commission. Generally speaking, the total annual premium involved in brokerage business of various companies has exceeded 3 billion yuan (property insurance and life insurance), and the annual commission income of leading brokerage companies has approached 1 billion yuan (property insurance and life insurance), which has developed very rapidly.

However, there is no final conclusion on the key issue of insurance brokerage commission standard, and there are many doubts in the insurance market. Moreover, in the business operation of individual brokers, the brokerage commission ratio has actually become the primary indicator for them to choose insurance companies. They simply pursue a high commission ratio, without fully considering a series of important factors such as the solvency, professional level and service commitment of insurance companies. In this way, how can they reflect the interests of the insured and the insured? Therefore, it is very necessary to analyze and demonstrate the reasonable commission ratio of insurance brokerage companies in detail, and the following will make a preliminary discussion on this:

Basis for insurance brokerage companies to collect commissions

As a participant in the insurance market, insurance brokerage companies must have reasonable income to maintain their healthy development. From the experience of foreign countries, there are two main ways for the income of brokerage companies: one is to extract a certain proportion from the insurance company's premium, that is, "brokerage commission" as a reward; The other is to charge "consulting fee" directly to the customer, that is, the insured. Comparatively speaking, the collection of consulting fees must refer to the development of the insurance market and the acceptance of customers, and the time and manpower required for possible claims service in the future cannot be accurately defined, so it is not easy to implement in the initial insurance market in China. Therefore, it is common in China insurance market to directly deduct a fixed percentage from the insurance premium as brokerage commission.

From a macro point of view, there are internal factors for insurance companies to distribute a fixed proportion of insurance premiums to insurance brokers, which are mainly manifested in the following aspects:

1, the insurance brokerage company is the customer source of the insurance company: the business from the brokerage company saves a lot of business costs (exhibition expenses) of the insurance company, indirectly saves the public relations and advertising expenses of the insurance company, improves the work efficiency and further expands the market space faced by the insurance company. Therefore, it is completely reasonable to divide a fixed proportion from the premium as brokerage commission, and the proportion of insurance company's business cost to premium income is also an important reference for determining insurance brokerage commission.

2. The business sources of insurance brokers are relatively standardized: insurance brokers provide risk management schemes for the subject matter of insurance, and after providing training and lectures for the insured and the insured, the safety factor of the subject matter of insurance will be significantly improved, and the probability of insurance accidents and the amount of claims will be rationalized under the same conditions, which will also help to improve the profit rate of insurance companies.

3. A good entry point for insurance brokers: brokers' involvement in the insurance market will undoubtedly subtly ease the antagonistic "buying and selling" relationship between insurance companies and customers, and will eliminate the distrust and incomprehension between some customers and insurance companies. In particular, the professionalism of insurance brokers in claims processing will help to reduce the pressure of insurance companies directly facing customers, save a lot of time, fundamentally promote the development of insurance companies and expand the insurance market, thus contributing to the further business development of insurance companies.

From the above analysis, it can be seen that it is reasonable for insurance brokers to collect brokerage commissions from insurance companies.

Analysis of business expense quota of insurance company

The amount of business expenses of an insurance company is an important link in determining the insurance broker's fee standard, including the following aspects: depreciation of fixed assets, personnel expenses, office expenses, advertising public relations, disaster prevention and loss prevention training and other business-related expenses, including

Including the service fee paid to the insurance agent or loss adjuster. Here is a brief analysis of the cost quota of property insurance companies:

The following is the expense ratio statistics of property insurance business of some foreign-funded insurance companies: (Table 1)

Proportion of annual insurance business expenses of insurance companies Korea Hyundai Insurance

(hydai)199729.2%199826.4% Swiss Fengtai insurance

(Winsor) 199729.8% American International Group

(American International Group) American Federal Property Insurance Group

(Jubao) 199932.30%200032.79%

As can be seen from the above figures, the proportion of business expenses of general property insurance companies to premium income is basically maintained between 20% and 35%; In other words, the amount of business expenses required for a property insurance company to obtain a certain business is 20%-35%, with an average of 27.5%.

Then, what is the brokerage commission ratio of insurance brokerage companies in foreign property insurance market at present? According to the market survey, the specific amount of insurance broker's commission varies with different countries, insurance types and markets, but it is basically maintained at 10%-20% of insurance company's premium income, generally around 15%. For example, in the modern American insurance market, the proportion of brokerage commission in automobile insurance business is generally 16% of insurance premium; In commercial fire insurance, the commission rate is about19%; General liability insurance, the commission rate is 18%. Comparing the business expenses figures of insurance companies in the same period, we can make the following bold inference: the reasonable range of the commission ratio of property insurance business of insurance brokerage companies should be 50%-60% (the lower limit is 50%, and the upper limit is 60%) of the business expenses required by insurance companies for corresponding types of insurance, and it will fluctuate up and down based on 55% of the average business expenses. There are still some differences between different types of insurance and different insurance markets.

At present,15%, the commission convention in the international property insurance brokerage market, is exactly 55%(27.5%) of the average cost of property insurance business of insurance companies.

Reasonable commission rate in China insurance market

Let's analyze the main business indicators of some domestic property insurance companies at present: (Table 2)

Annual expense rate of insurance company: China People's Insurance Company 199927.37% 200030.88% China Ping An Insurance Co., Ltd.

Limited company (including life insurance) 199924.70% 200025.77% China Pacific Insurance Company 199920.72% 200022.35% Huatai Property Insurance

199927.49% Limited by Share Ltd 200037.76% Tianan Insurance.

Limited by Share Ltd199933.74% 200030.51%Huaan Property Insurance

Limited by Share Ltd 199935.62% 200033.42%

It is not difficult to find that in the underdeveloped insurance market in China, there are obvious differences in the operating conditions of various insurance companies, and the proportion of business expenses is quite different, which is generally slightly higher than that of foreign counterparts. It can be calculated from Table (2) that the business expenses of property insurance companies in China are basically maintained at 20%-38%, with an average of 29%.

Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.