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Vehicle insurance reform imperative in China

BEIJING – Vehicle insurance reform is imperative in China, said Wang He, executive vice president of PICC Property and Casualty Co., Ltd., at 2015 China Vehicle Insurance Forum hosted by Tsinghua University School of Economics and Management (Tsinghua SEM) on May 12.

“Vehicle insurance has become a daily necessity in people’s life from a service for a small group of customers,” Wang said. “China’s low consumer satisfaction with vehicle insurance is caused by not only company management problems, but also unreasonable system and mechanism. Integrity and customer experience are cores of insurance industry.”

“Vehicle insurance accounts for 70 percent of property insurance in China now and its income reached ¥450 billion ($72.6 billion) in 2013,” said Chen Bingzheng, professor of finance in Tsinghua SEM and director of China Center for Insurance and Risk Management. “Currently, only 50 percent of motor vehicles have insurance and 87 percent of automobiles own the Compulsory Traffic Accident Liability Insurance in China.”

China will start a pilot program of vehicle insurance reform in Heilongjiang, Shandong, Guangxi, Chongqing, Shaanxi and Qingdao as of June 1, according to a notice posted by China Insurance Regulatory Commission (CIRC).

“Vehicle insurance reform will be implemented nationwide if the result of pilot program is satisfactory after a half year,” said Li Feng, CIRC director responsible for property insurance.

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