A Discussion About How Could Shen Zhen Motor Vehicles Insurance Marketing Get Through The Current Predicament

The People's lnsurance Company of China (PICC) was founded in Shenzhen in early 1980's; the insurance industry has been developing considerable success progress during last twenty years. In Shenzhen city, the total premium income was about 9.9 billions RMB during year 2004 and the estate property insurance played an essential role in the entire market, it was about 4.4 billions RMB. Alternatively, motor vehicle premium have been holding 60% of all the estate properties', therefore, the performing of motor vehicle insurance was likely the key in further development. However, the motor vehicle insurance industry has getting in recession since 1997, especially in 2000. The motor vehicle insurance struggling roughly year by year in the market, it was driving into vicious circle of Prisoners'Dilemma. This article focuses on the analysis and discussion of this region in order to find out solution to deal with. The first chapter of the article is a brief of insurance market either in countrywide or Shenzhen in 2004. It shows that the total revenues kept decreasing in that period meanwhile the total premium income in motor vehicle operation was increasing rapidly. It appears that the Motor vehicle insurances will limit the entire insurance market in Shenzhen if it keeps going bad. Next, there is a historical review in Shenzhen motor vehicle insurance development, from this article, you can see there are five steps in the market, and they are perfect competition, low-level competition, furious competition, irrational competition, the hardly regression of rational competition. In the end of first chapter points out that the two key reasons are the national insurance companies'don't have property right clearly, so there is a lack of modern enterprise system; the old and irrational systems of motor vehicle insurance are still compulsorily widely used. The second chapter of the article concentrates on discussion in our national rated premium system. The first section recalled our national premium rate management system, it helps to understand that our insurance market has variable limitations in market principals, market communications, market monitoring, these limitations are the basic reasons which lead to irrational competition in insurance market price and dissymmetry in marketing information system, consequently, to be strict in insurance premium operation will not be able to solve the two issues above. In second chapter, the limitations in insurance system were concerned, which breach of rated insurance fundamental and restrained the flexibility of insurance agent's management, simultaneous, it makes insurance agents get to be passive position easily and turns into a disadvantage of the insurance agents'development, in impersonal it protects market monopoly and harms in consumers behalf; it Is disadvantageous to small company's development which newly had been established. Finally it pointed out under the market economy environment, strictly controls the administrative premium system, it has limited the insurance industry further development In chapter 3, it concentrated on description of the insurance marketing theory. In the first section, it shows fair premium is the principle of insurance premium quotation, in addition, the fair premium is effect by four factors which are expected claim cost, yield, administration expense, profit loading. Later on, in section 2, 3, 4, the true meaning of the insurance marketing theory was described. It pointed out that the competition among the insurance rate is the principle of market. To bring the insurance marketing price advantage that will be given a boost to insurance economy development. The chapter 4 is an analysis about two case studies of premium market in American and Taiwan, it is claimed through the cases that most of countries and areas had been experienced premium standard system from strictness to open-rated. Particularly, the reform process of Taiwan's motor vehicle premium rate liberalization has the very good model to the Shenzhen present vehicle market condition. Chapter 5 described that condition for Shenzhen motor vehicles 'individuation'subject is becoming mature. The reasons are as followed: 1. The management goal for each insurance company is changing over to focus on the economic benefit. 2. The foreign capital company rational management idea played a fairly good model role in the market. 3. The Actuarial profession receives unprecedented recognition in various insurance companies. 4. The motor vehicle premium rate market reforming is rapidly developing in the nationwide. 5. The direction of insurance supervising is transferring from micromanagement to macroeconomic.