What Is Underwriting Risk?

Underwriting is an important part of insurance business, which refers to the choice of the insurer to the insured, that is, the act of the insurer's decision to accept or reject the insurer's insurance.

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Underwriting is an important part of insurance business, which refers to the choice of the insurer to the insured, that is, the act of the insurer's decision to accept or reject the insurer's insurance.

It means that after the insurer submits a claim for insurance, it is verified that the insurer meets the conditions for underwriting and agrees to accept the application of the insurer, and undertakes

For "the insurance industry is driven by two wheels: one underwriting business, one is

When underwriting insurance companies, they should do the following:

The company is responsible for the loss of the insured property at the address listed in the insurance policy due to the following reasons:

(1) fire and explosion;

(2) Objects in the air have fallen and external objects have collapsed;

(three)

House (including indoor auxiliary equipment that already existed when the house was delivered for use, such as plumbing, gas heating, sanitation, water supply, pipeline gas and power supply equipment,

Process

The 2006 annual report shows that Ping An's underwriting loss in 2006 increased by 203%, far exceeding the growth rate of 21.3% in main business income. China Life's underwriting loss in 2006 was 13.8 billion yuan, a year-on-year increase of 71%.

As both Ping An of China and China Life are listed on A shares, the requirements for the disclosure of information in the annual report are different from previous requirements of the Hong Kong Stock Exchange. "According to the A-share disclosure requirements, the underwriting profit and investment profit of insurance companies must be disclosed separately. Therefore, if you look at the figures of underwriting profit alone, you will see a situation of" high debts. "

Generally speaking, the main factors that affect the insurance company's underwriting profit (or loss) are four aspects: premium income, insurance payments, operating expenses, and reserve changes. "In the first year, new businesses of insurance companies are generally loss-making, so the rapid growth of new businesses may lead to an increase in underwriting losses. The continuous expansion of effective business scale will lead to an increase in reserves, which will also cause Underwriting losses continue to increase, "said a person in charge of the Ping An Actuarial Department of the People's Republic of China. May vary in magnitude. "

Underwriting

"Underwriting profit loss is a common phenomenon in life insurance operations. Ping An of China and China Life have slightly different reasons for underwriting losses. The former is because the increase in reserves (36.7%) exceeds the increase in insurance business income (17.8%), while the latter is mainly Affected by the relatively concentrated maturity of some policies, long-term insurance benefits increased by 8.2 billion yuan in 2006. "Oriental Securities Insurance analyst Wang Xiaozheng analyzed," The important reason may be that insurance companies do not want their profits to fluctuate too much. . Ping An and China Life have had a better year this year, so the increase in reserve withdrawals may be to make up for the lack of reserve withdrawals in the previous two years, or it may be possible to withdraw reserves in subsequent years in advance. This is beneficial to the smoothing of profits. "

"The increase in insurance business expenditure is also one of the reasons for the increase in underwriting losses." The aforementioned Ping An Actuarial Department responded, "With the growth of the company's life insurance business scale, the insurance business expenditure has increased. It was 29.691 billion yuan in 2006, which is higher than 2005. The annual increase is 21.6%. The compensation expenses increased by 15.2% over the previous year, mainly due to the increase in short-term accident and health insurance product compensation expenses. In addition, the dividend product surrender insurance expenses increased. At the same time as business changes, handling fees and commission expenses have changed accordingly. . And the increase in operating expenses was mainly due to the increase in premium income and the expansion of business scale. "