What are the profit models of insurance intermediary companies in China?

There are two main profit models of insurance companies, one is underwriting profit and the other is investment income.

Underwriting profit:

Underwriting profit mainly comes from the fact that insurance companies should calculate the future operating costs on the actuarial basis when setting the rates, and then add a certain profit to the operating costs as the final price to ensure the profitability of underwriting business. However, this is uncertain. If the compensation in that year is lower than expected, the profit will be more. If snowstorm, typhoon and other big risks occur in that year, and the compensation situation exceeds expectations, then the underwriting profit will be reduced or even lost.

Investment income:

Investment income mainly comes from the insurance company will underwrite the premium, namely cash flow as insurance investment funds, through equity investment,

Mergers and acquisitions, financial investment and other ways have also brought rich profits to the company. If the underwriting business is profitable, the company's profit is the underwriting profit plus the investment profit. If the underwriting business is losing money, it will be compensated by the investment profit, and the excess profit is the company's operating profit.

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