A Study On The Business Performance Of China’s Professional Internet Insurance Companies

With the application of Internet technology in the insurance industry continues to deepen,insurance companies are paying more and more attention to using Internet technology to promote company development.In this context,professional Internet insurance companies have emerged.Their business model is novel and has advantages such as asset-light operation and flat management structure,but they also face great challenges,so it is especially important to study the business performance of professional Internet insurance companies.How to improve the business performance and enhance the competitiveness of professional Internet insurance companies is an important issue that should be considered and studied at present.This paper has six parts.The first part of the paper describes the background and significance of the research,the current status of domestic and international research,the research content and methods,the innovation and shortcomings.The second part introduces the bankruptcy reorganization of Yi’an Property and Casualty Insurance,which provides background support for the case study later.The third part firstly analyzes the reasons for the bankruptcy reorganization of Yi’an Property and Casualty Insurance,and then suggests the lessons to be learned from this case to other professional Internet insurance companies.The forth part analyzes the current status of the business performance of professional Internet insurance companies.The fifth part firstly selects relevant indicators from five aspects of solvency,profitability,operational capacity,development capacity,and earnings quality,secondly screens the indicators through cluster analysis method to construct the evaluation system of professional Internet insurance companies’ business performance,and finally uses the doubly weighted dynamic comprehensive evaluation method to analyze the business performance of professional Internet insurance companies in 2017-2021 to evaluate their business performance level and identify the existing problems.The sixth part proposes suggested countermeasures to improve the business performance of professional Internet insurance companies.The study found that Yi’an Property and Casualty Insurance was reorganized in bankruptcy due to insolvency resulting in insufficient solvency and huge losses in guarantee insurance business,and suggested that professional Internet insurance companies should strengthen the standardized management of insurance funds and enhance the risk disposal capability for cross-border financial business.The current average level of liabilities as a percentage of assets of professional Internet insurers has increased year by year,the average level of overall capital and core capital adequacy has decreased,the average level of profit generation from own capital is poor,the overall debt funding cost is high,the average level of income from foreign investments is highly variable,the average level of claims expenses from insurance business is high,the average level of business and management fees as a percentage of earned premiums The average level of premium income growth has been decreasing year by year,the average level of investment income growth has been changing,the average level of cash flow through operating income is poor,and the average level of cash flow through operating activities has been changing.In 2017-2021,the average level of comprehensive performance,solvency,profitability,operating capacity,development capacity and earnings quality of professional Internet insurance companies is poorly performed,and there are large differences in the level of inter-company differences and large gaps.Individual companies to a certain extent pull down the overall comprehensive performance and operating capacity of professional Internet insurers;some companies to a certain extent pull up the overall solvency,profitability,development capacity and earnings quality of professional Internet insurers.The problems of professional Internet insurance companies are mainly the expanding underwriting scale leading to the gradual expansion of the risks borne by the company,the increasing liability reserve provision and the increase of liabilities;the poor asset allocation and low investment returns;the product structure is mainly short-term insurance,with low average single premium,limited profit space and slow growth of premium income;it is difficult to avoid moral hazard and adverse selection problems by selling insurance products online.The payout ratio is high and the payout expenses increase;the net cash flow from operating activities grows slowly.In order to improve business performance,professional Internet insurance companies should strengthen the risk prevention of liability reserve,optimize asset allocation,adhere to the insurance product correction and innovation,control the payout expenses,and improve the net cash flow from operating activities,formulate more targeted solvency supervision standards.