According to industry insiders, the premium scale of the "flying order" business in the first quarter of this year increased by at least 15 times year-on-year.
In addition, at the time of the setback of the economic agency and bancassurance channels, the "flying order" business has also evolved into another form - a large number of people have returned to the individual insurance channels that have not yet implemented the "integration of reporting and banking".
The return of the "flying order" business also reveals the current situation of some market players in a dilemma: forward, commissions are declining, and it is difficult to survive; Retreat, fly a single business, and survive in violation of regulations.
However, the "flying order" business is like a sugar-coated cannonball, which seems to bring short-term benefits on the surface, but in the end it will cause far-reaching damage and blows to customers, salesmen, insurance companies and even the entire industry.
Reflux intensified
Under the "integration of newspapers and banks", the economic agency and the bancassurance were frustrated, and the "flying order" business was taken by the risk
Contrary to the previous expectations of the industry, in the market environment where bancassurance strictly implements the "integration of newspapers and banks" and the market environment of "integration of newspapers and banks" has been ushered in one after another, the "flying order" business has increased instead of decreasing, and a large number of insurance policies have quietly flowed to the individual insurance channel.
Previously, the "flying order" business was mainly focused on the insurance intermediary channel. Since the first-year commission and other expenses paid by insurance companies to insurance intermediaries are basically above 100%, insurance intermediaries have the ability to pay salespeople higher than the first-year commission level of the insurance company's exclusive agents. The high commission level has also become one of the important reasons for insurance intermediaries to attract a large number of salespeople to join.
Under the "lure" of high commissions, it is not uncommon for insurance company agents to use insurance professional intermediaries to "fly orders" in the past. Especially after entering the Internet era, the emergence of a large number of insurance agent platforms has further facilitated the behavior of "flying orders". While retaining the identity of the exclusive agent of the insurance company, the exclusive agent of some insurance companies registers on the Internet platform and recommends the products of other companies, which actually constitutes a "flying order", and even derives a platform specializing in the "flying order" business.
At that time, the regulator issued the Measures for the Administration of Life Insurance Sales Practices (Draft for Comments), trying to include the fees paid by insurance companies to intermediaries into the scope of management, hoping that the commissions of various channels would be adjusted to the same proportion, so as to curb the problem of "flying orders" by salespeople.
However, with the implementation of the "integration of newspapers and banks", the economic agency and the bancassurance channel both collapsed, and the problem of "flying orders" became more and more intense.
Judging from a number of industry exchange data, although the "integration of newspaper and banking" has not yet been fully launched, the premium income has begun to decline sharply. In the first five months of 2024, among the 45 life insurance companies included in the statistics, more than 60% of the insurance companies' agency channel production capacity declined year-on-year, with an average decline of more than 40%. Industry exchange data shows that in the first four months of 2024, the top 7 life insurance companies in the bancassurance channel showed negative growth in new single premiums, with an average decline of more than 20%. Among the 74 life insurance companies in the statistics, 50 bancassurance new policy premiums decreased year-on-year, accounting for 67.57%.
On the other hand, at a time when the economic agency and bancassurance channels have been frustrated, insurance companies have increased their investment in individual insurance channels, and the individual insurance channels that have not yet been strictly controlled have become the main path for the business flow of "flying orders". As a result, the "flying order" business has evolved into another form, that is, the intermediary salesperson returns to the exclusive agent channel of the insurance company, or makes a profit through the exclusive agent's private "flying order" to the individual insurance channel.
With the blessing of the Internet, "flying orders" have become a kind of business and are very popular. Some informal intermediary companies or illegal platforms specialize in attracting agents to their doors through various means, relying on third-party network platforms, agents can recommend insurance products to consumers, consumers take the initiative to complete the purchase process by clicking on the link, and agents get the corresponding "promotion fees".
According to industry insiders, the scale of "flying order" business premiums in the first quarter of this year increased by at least five times from the previous quarter, and by at least 15 times compared with the same period last year.
追本溯源
There is room for different channel fee standards, and some insurance companies are under pressure to turn to the scale of individual insurance
The "flying order" business has experienced a tortuous path from individual insurance to intermediaries, and from intermediaries back to individual insurance, but its basic logic has not changed, that is, which channel will "fly" to which channel with a high commission.
Retrospectively, the main reason for the return of a large number of "flying orders" to the individual insurance channel is the "integration of reporting and banking" to control the operating costs of the liability side, resulting in the squeeze of the cost space of the insurance intermediary channel.
The "integration of reporting and banking" requires that the commission rate level submitted by the insurance company to the regulatory approval or filing is consistent with the actual situation. For insurance companies, "expenses" are one of the core operating resources. If the cost level is lowered and the product pricing does not change, it means that a large number of intermediaries will be difficult to maintain the cost of normal operation, and once the product price is greatly increased, the competitive advantage of more cost-effective products of professional intermediary channels will no longer exist. "Flying orders" to personal insurance channels has become a shortcut to profits.
However, in the final analysis, the fundamental reason for the return of "flying orders" is the unequal policy in the early stage of "integration of newspapers and banks" and the different channel fee standards. The policy asymmetry is manifested in the fact that similar products are paid to front-line business personnel at different levels of commissions in different channels. The partial implementation of the "integration of newspapers and banks" has greatly reduced the commission level of the bancassurance channel and the intermediary channels of some companies, and the channel pattern has ushered in an opportunity to reshape.
Bancassurance, the Internet and the economic agency have now begun to implement the "integration of newspapers and banks", and its overall cost has dropped by about 50%, while the individual insurance channels have not yet implemented the "integration of newspapers and banks" due to the basic law of various insurance companies, the constraints of the team structure, as well as the cost standards, benefit distribution and other issues, and the commission payment is completely set by the individual insurance departments of the insurance companies, which leaves a huge room for some insurance companies to operate.
For example, a product of a large life insurance company headquartered in the south is about 20% before tax according to the standard of the product according to the agent when it is paid off in five years. And if it is an insurance channel, its after-tax commission can reach 42% or even higher, so a large number of policies are pouring into the company.
For some insurance companies, the fact that the bancassurance and economic agency channels have gradually implemented the "integration of reporting and banking" has also forced them to make efforts in their personal insurance. Taking the above-mentioned insurance companies as an example, one of the core reasons why the company is willing to invest heavily in the individual insurance channel is that under the influence of the "integration of newspapers and banks", its bancassurance channels, economic agency channels, and Internet channels are all under pressure, and individual insurance has become one of the few breakthroughs.
To a certain extent, the great development of the individual insurance channel is in line with the policy orientation of "integration of newspapers and banks", and in the short term, the channel has invested a lot and achieved slow results, but in the long run, this channel is still the key to building the core competitiveness of insurance companies because it is firmly in the hands of insurance companies. It's just that under the popularity of "flying orders", the superficial prosperity of the individual insurance channels of some insurance companies has become a gorgeous bubble.
Of course, it is only a matter of time before the individual insurance channel fully implements the "integration of newspaper and banking", because it has become a consensus from regulators to market entities to strive to reduce the cost of debt in order to cope with the era of low interest rates. This means that there is not much time left for the personal insurance channel.
Drink poison to quench thirst
The "flying order" business is full of disasters, reducing the value of individual insurance and increasing the risk of the industry
If channel management is compared to a marathon, the original four channels of individual insurance, economic agency, bancassurance and Internet are all running on their own tracks, and each channel has its own rhythm and strategy. However, the implementation of the policy of "integration of newspapers and banks" is like a starting gun, requiring players from these channels to return to the starting line, readjust their pace and strategy, and adapt to the new rules and environment. Only the individual insurance channel has been able to move forward along the original track and have more opportunities and advantages in the new competitive landscape.
It should not be ignored that the flying order business with high commissions as a gimmick seems to be profitable, but it actually hides risks.
On the one hand, "flying orders" are prohibited by existing regulatory provisions. Generally speaking, an agent can only register in one insurance institution, if he has been registered in an insurance company, he has no right to sell the products of other insurance companies, once the sale constitutes "beyond the scope of insurance agency business", "entrust other personnel to engage in insurance agency business" and other violations, the agent will also face severe penalties.
On the other hand, the flyer business often involves misleading customers, providing false information or concealing important information, making it difficult for customers to truly understand the risks and benefits of the products they purchase.
The "flying order" business not only undermines the fairness of the market, but also may lead to the emergence of a situation of "bad money driving out good money" - the main body that strictly implements the "integration of newspaper and bank" faces the double blow of declining premium scale and policy "exodus", and the main body that exploits policy loopholes is at large.
For insurance companies, "flying orders" is not "always flying orders", and this kind of short-term quick success and quick profit behavior will have a long-term negative impact on their individual insurance channels. The personal insurance channel, which was originally at the cost of clearing millions of agents, has only crawled out of the quagmire of extensive operation, and has to endure the risk of deterioration of the industry atmosphere, and in the long run, the high cost in the sales process has dragged down the growth of channel value.
It may be said that the "flying order" business is like a sugar-coated cannonball, which seems to bring short-term benefits on the surface, but in the end it will cause far-reaching damage and blows to customers, salesmen, insurance companies and even the entire industry.