It has been more than ten years since the property insurance enterprise included the accident insurance. Because the market is so competitive and the cost of running accident insurance is high the premium of accident insurance cannot balance against the operating costs.In addition,the moral hazard cases and strict laws and regulations cause property insurance company to face financial loss and the punishment and penalty from the FSC(the Financial Supervisory Commission).If the property insurance enterprise wants to offer the accident insurance and make profits from it, the enterprise must pay special attention to risk control, underwriting, claims operations, and reinsurance arrangements. Accordingly, it is very important to take measures to prevent moral hazard by means of good quality control of the business and the strict operating procedures for protection of the underwriting.
The approach of this project is statistical analysis and deductive reasoning via a collection of regulations, books, journals, dissertations and official statistics. This study furthermore uses four modules to examine the property insurance and life insurance businesses. They are the premium income, claim payment, the content of products, and the way of sale.It is hoped that the results of the study, along with my recommendation, will be of use to the property insurance enterprises to revise their accident insurance underwriting procedures, and to the government authorities to amend some of the insurance rules.
The results of the thesis are as follows:
1.The importance of the process while selling the accident insurance: During the whole transaction of the accident insurance, the first person contacting the client is the sales staff, and, moreover, he or she would be the only one that gets in touch with the insured. Therefore the sales staff plays the role of the bridge between underwriters and clients. The underwriting message, which the salesperson provides, is very important. The more correct messages the salesperson offers, the more accurate assessment the underwriter makes. However, property insurance companies sell the accident insurance through channel marketing, so it is difficult for them to manage the Channel’s sales, i.e. infeasibility of controlling the quality of the accident insurance.
2.The purpose of "underwriting" is to help the insurance company secure its profit. The insurance company can achieve revenue target profits and help to prevent moral hazard if there is a suitable underwriting policy. If not, even a rapid development of the business in accident insurance within a very short time would result in serious losses to the insurance company under a wrong underwriting policy in the long run. Consequently, underwriting policy is very important to insurance company whose underwriting staff plays the key role in the operating of the company.
3.Accident insurance premiums have increased about twice as big as the original since 2015, but the growths in car insurance and fire insurance premiums are lower and limited during the same time span. So, accident insurance has become one of the major products in the property insurance enterprise to develop its business in the future.However, the rules supervising personal insurance initiated by relevant government authorities will be becoming more stringent. Property insurance enterprise should take it into account how the company can take care of and improve the quality and quantity of the accident insurance under such a strict supervision.Recent official approval of the online purchase of insurance and the 3-year accident insurance opens up new opportunities for the property insurance enterprise.