Insurance commission will be determined based on the actual operating conditions of the insurers, while the channel commission payment basis will directly reflect operating costs, after rate deregulation of auto insurance. Therefore, from the perspective of insurance business, the commission ratio of channel and the profit margins of insurance businesses were analyzed and explored from three aspects:
1. The analysis of the relationship between the commission rates of insurance sales channel and good business.
2. The analysis of the relationship between the commission ratio and loss ratio in insurance sales channel.
3. The comparative analysis of whether or not significant differences exist in the relationships mentioned above before and after put into the acquisition expense limit.
In this study, a domestic insurance company (hereinafter referred to as Company C) was adopted as the subject to explore personal physical damage automobile Insurance underwriting and losses that incurred from 2007 to 2011. First, the regression model was adopted to explore whether or not a linear relationship exists between the commission rates (commission levels) among the channels and the number of cases (ratios) without claims. In addition, the acquisition expense limit on auto insurance policy was 18.4% after July 2009. Hence, The T statistical test in study loss ratio of insurance sales channel to verify significant differences whether claim or not, after put into the acquisition expense limit.
Through the research report, the relationship between the commission rate and profit margin of personal physical damage automobile Insurance sales channel was confirmed before and after put into the acquisition expense limit.
1. Prior to July 2009, the number of insurance brokers and agency without claims and average loss ratio was increasing with the rise in commission payments; the no-claim number in the salesmen channels did not increase with the rise in commission payments, thus the absence of a linear relationship. The average loss rates increased with the rise of commission payments, thus showing a positive correlation.
2. After July 2009, the average loss ratio of the insurance brokers and agency channels decreased with the rise in commission payments, and the average loss ratio increased by 4.6%. The increased average loss ratio of the low commission level contributed to this outcome; the average loss ratio of the insurance salesmen channels decreased with the rise in commission payments, and the average loss ratio decreased about 7.4%. The decreased average loss ratio of the high-commission level contributed to this outcome.