By Jiang Fan
Since China Life Insurance (Group) Company launched the first trial of rural micro-insurance in August, China Pacific Insurance (group) Co., Ltd., Taikang Life Insurance Company Ltd., etc. followed one after another. On October 15, New China Life Insurance Co., Ltd. (abbreviated to NCL hereinafter) started rural micro-insurance in Henan province jointly with its foreign shareholder Zurich Financial Services Group. Previous to it, China Insurance Regulatory Commission revealed that several insurance companies were applying to launch rural micro-insurance pilots. Surely, more insurance institutions will ride into the rank of micro-insurance service.
Policy and market are getting better
Rural micro-insurance is an important part of rural micro-finance, and it features in low premium and coverage. Presently, micro-insurance is given widely attention by the international society, and over 100 countries have developed micro-insurance worldwide. The experience of launching micro-insurance in India, Philippines and other developing countries testified that in the rural regions without social security system, micro-insurance is an effective method to solve the problem of basic insurance of poor rural population, and it has strong market vitality.
At present, the rural insurance market is steadily getting hotter. More and more rural service outlets emerged, and their business scale is getting larger gradually. The objective environment of rural micro-insurance development is getting increasingly mature. According to incomplete statistics of China Insurance Regulatory Commission, the premium income of rural life insurance in 2007 was near RMB40 billion yuan. The Third Plenary Session of the Seventeenth Central Committee of the CPC put forward that the integral system of the urban and rural economic and social development should be basically established, and some basic goals of rural reform and development should be realized in 2020, including that the net income of farmers should be twice as that of 2008. The issue of driving the rural insurance was mentioned for several times, including enhancing rural social security and developing rural insurance etc.
Recently, Wu Dingfu, President of China Insurance Regulatory Commission, emphasized again that we should make efforts to drive the development of rural insurance market with the micro-insurance as a breakthrough. China Insurance Regulatory Commission also revealed that some international organization has contacted domestic insurance companies and planned to provide capital and technology support for companies which intended to participate in the micro-insurance pilots. Next year, International Association of Insurance Supervisors (IAIS) will hold an international seminar on micro-insurance in China. Obviously, both the market conditions and policy conditions are conducive to the development of rural micro-insurance.
Taking advantage of the market and policy, NCL started its adventure into the micro-insurance field in a more unique way on October 15. To the chosen "micro-insurance pilot village", NCL and Zurich Financial Services Group presented a special gift at first. Namely, from October 15, all villagers from 16 to 60 years old of Qianheizhai Village, Guandu Town, Zhongmu County, Zhengzhou City, Henan Province got a "Xilaibao" accident insurance security, the accumulative insurance coverage of which will amount to RMB36.30 million yuan.
Insurance donation may not be news. But it's rare to choose low-income villagers as donated objects and that the accumulative insurance coverage amounts to over RMB10 million yuan. For one thing, we can feel the increasingly protrudent position of rural insurance market. For another, we can see indeed that NCL has made sufficient preparations for the micro-insurance development.
Expand new space jointly
As learnt, Zurich Financial Services Group with organizations in over 170 countries globally has comparatively rich experiences in terms of micro-insurance. It has not only specialty micro-insurance organizations, but also set up specialty micro-insurance project groups in Latin America, etc. Meanwhile, Zurich Financial Services Group is also one of the multinational organizations which are always invited for experience exchange by China Insurance Regulatory Commissions in the period of micro-insurance project research. As to the start of micro-insurance this time, NCL must have got many instructions from Zurich Financial Services Group in terms of product development, sales, risk control, and evaluation. Taking risk control as an example, NCL plans to degrade it through three phases: In the first phase, it will conduct micro-insurance c in some regions, where it promotes mainly accident insurance with individual sales as the main and group sales as complement. In phase two, it will expand gradually pilot zones according to the market and policy changes, and adds some endowment insurance and health insurance aiming at special groups like disabled people, as well as develops the group and bank agency sales channels. In the end, i.e. in phase three, it promotes micro-insurance nationwide, develops new products, perfects the product system, completes the sales channels and backup supports, etc. Undoubtedly, NCL and Zurich Financial Services Group will establish a closer collaboration during promoting the micro-insurance.
As to micro-insurance products, the supervisors set a definite rule-they must be affordable for farmers. Products are limited to be accident insurances and term life insurances with insurance coverage from RMB10, 000 to RMB 50,000 yuan and annual premium from RMB50 to RMB100 yuan. At the same time, it demands that micro-insurance can't be bundled. It can't be made additional risk, avoiding that farmers can't afford the cheap products which are bundled. According to the situation of companies which have started pilot presently, such products are welcomed by farmers.
Completely adhering to the rule of "affordable for farmers", NCL launched three simple micro-insurance products, namely the accident insurance "Xilaibao" relevant to savings deposit, "Jiedaibao" tailor-made for micro-loan borrowers, and "Muyingbao" caring for rural women at child-bearing age. The products are designed aiming at the security of accident farmers are easily exposed to, and tries to lower fees in reasonable scope and simplify the insurance application procedure. Taking "Xilaibao" as an example, its premium is only RMB30 yuan, and for those who possess savings deposit and require of short-term accident security, once they die or are completely disabled in the insurance period after they apply for the insurance, they can get an insurance coverage of RMB50, 000 yuan at most.
