The Insurance Of Rerurns Freight’s Insufiiciency And Development Prospect

In the new era, with booming development of the Internet, the electronic commerce, as a new force, rapidly rises. Shopping online, an important constituent part of the e-commerce, has become one major way for consumers to buy commodity they need. However, as the volume of online shopping transaction increasing, the problem of the return is more and more serious. Since 1980, the insurance industry has achieved high-speed development. Grasping the development trend of the e-commerce, the insurance companies have carried on the positive exploration, and because of this the insurance e-commerce emerges as the times require.Risk of return existing in online shopping and the development of insurance e-commerce impels the insurance company to create an innovative insurance product-the insurance of returns freight, which can largely meets the online shopping consumers’demand of returned purchase and can also increases the profits of online sellers who have bought it. Nevertheless, the insurance of returns freight increases arbitrary of online shopping buyers and lowers their cost of returning goods, which makes the returns rate of commodity online rise dramatically and thus insurance company will face enormous settlements. There exists big loss risk of the insurance of returns freight. At the same time, it can easily cause moral hazard and adverse selection due to its narrow coverage, imperfect pricing and claims mechanisms. Therefore, it is of great importance to analyze the possible risks of the insurance of returns freight from the perspective of the insurance company, which will help promote its transcendent development and let insurance companies gain profits on this insurance.Firstly, this paper describes the insurance of returns freight based on its clauses and compares it with the traditional insurance product from six aspects, such as insurance sales channels, the pricing of insurance products, insurance, insurance underwriting, insurance claims and insurance renewal. Secondly, this paper focuses on analyzing probable risks of the insurance of returns freight. From the online shopping sellers and buyers, the reason of returned purchase systematically summarizes and expounds in the third and fourth part of this paper for that high returns rate makes the insurance company pay much. We can find that online sellers’inappropriate behavior, such as selling inferior products, publishing incomplete commodity information, misleading and deceiving online shopping consumers, making mistake in operation, having poor service, adopting improper means of competition, will lead online shopping consumers return goods, and also, consumers’own preferences instability, risk appetite behavior, high impulse characteristics, hedonistic behavior, and so on will generate their behavior of return purchase. Meanwhile, the adverse selection and moral hazard are caused by deficiencies of the insurance of returns freight. Subsequently, this paper proposes some suggestions, perfecting the pricing and compensation mechanism and making use of the incentive mechanism, for the insurance company to reduce risks of the insurance of returns freight. At last, this paper prospects the future development of the insurance of returns freight. In future, attracting more and more users, this new insurance product will show strong vitality.