Research On Developing “Pay-as-You-Drive” Automobile Insurance In China

The automobile insurance industry competition of world is fierce. At the same time, the use of vehicles has a lot of consumption on the non-renewable energy. People want to develop a new insurance pricing method which makes every owner pays fair and reasonable premiums, on the other hand, encourage people to improve their driving habits to save energy. So pay-as-you-drive automobile insurance came out as the times require. PAYD automobile insurance discussed in this paper is the latest product of Usage Based Insurance.Usage Based Insurance is based on the use of the subject-matter insured situation and determine the appropriate risks faced.PAYD automobile insurance acquire rate data which based on the use of insured vehicle.The data include distance traveled, time, location and road conditions and other information. According to the information, insurance companies must use hardware and software equipment with modern technological.Currently the market regard on-board diagnostics(OBD) as the most potential equipment.OBD is installed on the insured vehicle, so that it can accurately obtain the vehicle driving information, and transmits those information to the actuarial department’s database.In recent years, China’s automobile insurance market is in the primary stage of rate marketization reform.the Insurance Regulatory Commission of China will give more auto insurance pricing right to the insurance companies, so companies can take advantages of their own abilities and provide more insurance products for the car owners. More importantly, the insurance industry is now in the industrial revolution of the Internet.The development of the Internet technology will subvert many traditional industries.The emerging Internet financial enterprises has swept through the traditional banking and fund industry.Domestic insurance companies have a insurance market which worth more than six hundred billion yuan.The market should already be targeted by the Internet companies.If domestic insurance companies want to be away from the impact of the Internet revolution, they must have a awareness of "innovate or die" and embrace the Internet technology to improve their own competitiveness in the market and adapt to the new normal situation of economic development.This paper is divided into five parts. The introduction introduces the research content, the significance and the methods. The second part introduces the basic theory of pay-as-you-drive automobile insurance and the insurance with respect to the traditional auto advantage, and the development necessity of the insurance in china. The third part summarizes pay-as-you-drive automobile insurance in foreign experience and the obstacles for development, also describes the specific content of the four kinds of common pricing methods. In the discussion part status determining car insurance rates in China,summarizes the implementation according to the driving situation pay insurance feasibility and may encounter obstacles of our country. In the last part from the national macroscopic policy and the company gathered two aspects of policy, and put out the implementations of the charge according to the driving situation of auto insurance in the proposed measures in our country’s development, including the formulation of supporting administrative rules and regulations, establish special development fund, the choice to adapt to China’s mode of operation and development professional automotive equipment etc.. Our implementation of the pay-as-you-drive automobile insurance need to experience the product development stage, the trial operation period, the promotion period and the mature period. The development of the PAYD automobile insurance in our country require each stage promote steadily.