Research On The Influence Of Premiums Receivable On The Profitability Of Property Insurance Companies

In recent years,with the development of China’s insurance industry,the premium income of property insurance companies has reached 2.6 trillion yuan in July 2022.The number of property insurance companies is increasing,and the competition is becoming more and more fierce,but the profitability of property insurance companies is decreasing.In particular,with the continuous advancement of the "commercial fare reform",auto insurance has gradually become standardized,and the profits brought by auto insurance have gradually become stable.Most property insurance companies have begun to develop non-auto insurance business,and non-auto insurance business is free from the constraint of "seeing fee invoice" of auto insurance business.Therefore,with the development of non-auto insurance business,a large number of premium receivable problems have been caused.Seriously damage the property insurance company’s profitability level.The problem of receivable premiums is very difficult to solve.First,this paper studies the causes of receivable premiums,including external and internal causes.The external causes include the rapid development of non-auto insurance business,the participation of serious illness insurance and policy-based agricultural insurance,and the failure of coinsurance and reinsurance business to collect receivable premiums in time.The internal reasons include the false increase of receivable premiums by business departments,the imperfect management system of receivable premiums and insurance intermediary sales channels;Secondly,there are three adverse effects of the receivable premiums: one is to increase taxes,the other is to increase the cost of the property insurance company,and the third is to reduce the available cash flow of the property insurance company.Finally,the profit sources of property insurance companies include underwriting profit and investment profit,and premiums receivable affect the profitability of property insurance companies by affecting their underwriting profit and investment profit.Therefore,this paper uses the panel data of property insurance companies to conduct empirical analysis and explore the impact path of premium receivable on the profitability of property insurance companies.The data source of this paper is the panel data of 38 domestic property insurance companies from 2011 to 2020,with ROA as the explained variable and premium receivable as the explanatory variable.Asset-liability ratio,underwriting leverage ratio,return on investment,comprehensive expense ratio,comprehensive loss ratio and auto insurance ratio were used as control variables for fixed-effect model analysis.Besides analyzing the whole sample,property insurance companies were divided into large property insurance companies and small and medium-sized property insurance companies for analysis respectively.The results show that from the whole sample,the receivable premiums have a significant negative effect on the profitability of property insurance companies.According to the sub-sample,the premium receivable has an insignificant negative effect on the profitability of large property insurance companies,while the premium receivable has a significant negative effect on the profitability of small and medium-sized property insurance companies,indicating that the impact of premium receivable on small and medium-sized property insurance companies is greater than that of large property insurance companies.Finally,the paper puts forward corresponding countermeasures and suggestions for the problem of receivable premiums.First,establish an effective communication and traceability mechanism with government and enterprises;Second,strengthen the internal management system of receivable premiums;Third,strengthen the supervision of premiums receivable.In recent years,with the development of China’s insurance industry,the premium income of property insurance companies has reached 2.6 trillion yuan in July 2022.The number of property insurance companies is increasing and the competition is becoming more and more fierce,but the profitability of property insurance companies is decreasing.In particular,with the continuous advancement of "commercial fare reform",auto insurance is gradually standardized,and the profit brought by auto insurance gradually tends to be stable.Most property insurance companies begin to develop non-auto insurance business,and non-auto insurance business does not have the constraint of "seeing the fee and issuing the bill" of auto insurance business.Therefore,with the development of non-auto insurance business,a large number of premium receivable problems are caused.Seriously damage the property insurance company’s profitability level.