The first basic profit of an insurance company is to make money by payout ratio price difference. Generally speaking, people who make claims are smaller than those who don't. This probability and premium will be calculated by actuaries in combination with inflation and other indicators. This premium cannot be more or less, which is not conducive to sales, and less will affect profits.
The second profit point is that the premium paid to the insurance company will be invested by the asset management company of the insurance company, such as some national projects, and invested in listed companies. In some previous news, we also saw that insurance companies kept buying listed companies. Of course, most investment projects are projects with high security level and considerable profits.
Third, the premium is related to many factors, such as different insurance companies, different types of insurance, different quotas, different payment years and different ages. Choose the insurance product that suits you best. There is no price level for insurance products, only whether it has the value that meets your needs, and choose the insurance configuration scheme that suits you within your own economic scope.
There are three main ways for insurance companies to make money: first, there are three differences. For example, we originally planned to reduce three, but now we have only reduced two. The scheme here is not decided by the insurance company itself, but the conclusion drawn through mathematical statistics. Second, the cost difference, such as the company's hydropower budget this year, if it is less than the actual budget, it will also make money. Third, poor investment means that insurance companies will invest some money. Insurance companies are prohibited from investing in high-risk investment projects, such as stocks and futures. The main means of investment by insurance companies are agreement deposits, subordinated bank debts, national key projects, national bonds and funds.
Whether it is a company or an individual. Too much money is still very little.
Insurance company's premium, there is no fixed external payment period, and there is no need to give interest when paying, which is simply free to use. This is called liquidity. Insurance companies investing with these funds can be regarded as indefinite fixed investment, which will increase their income and profits, thus playing a positive role in enhancing the company's value. Whether it is Buffett in the United States or Ping An Group in China, it is the same.
We are familiar with the logic of making money: profit = income-expenditure. There are two ways to make money: raise the price or reduce the cost. However, insurance companies can make money in different ways, and even some insurance companies will lose money after reducing costs! So ... how do insurance companies make a profit?
In fact, the profit logic of the insurance industry has its own terminology, which consists of dead difference, fee difference and spread. Do you have a headache when you see nouns related to calculation? Don't be afraid, knowing that people don't like counting, Mark told a short story in a different way today to help you easily understand how insurance companies make money.
tragedy
A long time ago, there was a beautiful town on the Mediterranean coast. Only 65,438+000 families live in this town. Each family has only a couple, a pair of children and a fishing boat. Everyone lives by fishing at sea. On this day, 65,438+000 people went to sea as usual. I came back at night and found it was missing 1. Anxious wife and a pair of children waited all night. This incident has dealt a great blow to the other 99 families, and everyone is worried that they will suffer the same tragedy.
wisdom
Collective wisdom is infinite. Ninety-nine people got together to discuss. Before going out to sea, they put a fish box by the dock. Before going out to sea, they always put two silver dollars in the box. If any man doesn't come back, they will take out 100 silver from the box and give it to their families until their daughters get married and their sons get married.
accident
Fortunately, in the next 10 days, the fishermen did not have any accidents at sea, but the accidents on the shore did happen. 1 1 day, a child accidentally knocked over the fish box while playing at the dock. In the process of picking up the silver dollar, everyone found that the original box should be 99*2* 10= 1980 silver dollar, and the result was less than 900.
wisdom
Collective wisdom is infinite. After investigation, it was found that seabirds were at work, so it was discussed that every time they went fishing at sea, they could earn about 10 silver, and 99 people who went out to sea drew lots to leave a guard fish box in turn and gave him 10 silver as a guard fee. The money hasn't been lost since then. Since then, although people have been killed occasionally, some little boys have grown up to be new fishermen. The money in the box is growing slowly.
smart people
At this time, a wise man said, I will stay and guard the fish box. I don't want 10 silver dollar, I just want five, so everyone agrees, because after all, it is equivalent to spending a little less on the guard fee.
A smarter person
At this time, a clever man B said, I will stay and guard the fish frame without money, so that everyone will be happier, because it is equivalent to not paying the guard fee.
doubt
Everyone can understand A's behavior. After all, going out to sea is risky, so make less money and change your peace. People don't understand B's behavior at all. B what does she live on?
Smarter people.
At this time, a smarter man C said, I'll stay and watch the fish box. I don't want silver anymore, but I add 1 silver to the box every day.
lively
A, B and C got into a fight. On the one hand, everyone is watching the excitement, on the other hand, they are even more suspicious. Is this C a liar who is going to run away with money?
Ultimate big boss
At this time, the owner of an insurance company came to town. He said that everyone should stop quarreling. Everyone will give me three silver dollars every time before going out to sea. If there is an accident, I can still get 100 silver. If you don't go fishing after 50, you can also take all the money you paid before and enjoy an extra 20% bonus.
Fish boxes can make money without big BOSS.
After the story is finished, why is the boss of an insurance company the last one? Because he finally earned the sum of dead difference, fee difference and spread. It is also important to pay attention to the order of the three differences, which has strong internal logic. Where are these three differences? Now it's Mark's turn to answer your question.
1. Death difference: People who spend these three silver dollars are healthy during the guarantee period, so the boss only collects money and does not involve compensation. This is the difference in death.
2. Fee difference: the boss paid 100 silver as the operating expenses, and finally only paid 80 silver, so the saved 20 silver is the fee difference welfare, and vice versa.
3. Spread: The boss invests the money he receives. Under the premise of stability, the more he earns, the better. He tried to maximize the income of the money in his own hands. This is the spread. In fact, the insurance company earned mainly this money, which is why in the end, two smart people, B and C, actually gave the money to the villagers without receiving money.
Returning to the theme, the profit model of insurance companies is dead difference+fee difference+spread. Therefore, for insurance companies, not only can they refuse to make money, but timely payment is a good business card for every insurance company, and they will not lose money or dare to lose money. Therefore, insurance companies that want to make money must build good products. The more people buy, the more principal. The higher the rate of return, the higher the income.
There are three differences in the income of insurance companies, namely, spread, death difference and handling fee difference.
Say it in a popular way.
The spread is the annual interest rate used by insurance companies when designing products, and the maximum is no more than 4.025%. Results In practice, the investment income reached 5%, and the middle spread of 0.975% was the money earned by the insurance company.
Death difference is the death rate used by insurance companies when designing products. Because of the improvement of medical level, life expectancy has increased year by year, and the mortality rate of all ages has dropped significantly. The difference between the designed mortality rate and the actual mortality rate is earned by the insurance company.
Cost difference refers to all kinds of expenses that have been included in the product, such as marketing personnel's commission. In the second year, the marketing staff lost their number, and the customer paid the premium normally, and the renewal commission of the marketing staff was earned by the insurance company. There is also the cost of renting the workplace and the salary of the logistics staff, which may save money.
The so-called high premium is relative
If you want to, is your insurance consultation right?
1, such as accident insurance with low incidence, aviation insurance is very cheap, and you may say that it is unnecessary;
2. payout ratio's critical illness insurance, hospitalization insurance and outpatient insurance will definitely be expensive, but the premium can also be reduced by adjusting the amount of insurance and the proportion of compensation.
3, the so-called insurance companies make money, according to the current insurance market in China, the fee difference is already very small, mainly from the investment income of insurance companies! Of course, with the growth of insurance company's premium scale, the personal rate should continue to decline in the future.
Consider dead difference, fee difference and spread.
If the actual scheduled mortality rate is low, then the insurance company will make money.
If the operating cost is reduced, it can also save money and make money.
Premium income is used for investment, and a good return on investment can also make money.
For reference!
Insurance is one of the most profitable industries. If you don't make money by premium, what other income can you have? General insurance companies use everyone's premiums to lend money and invest in projects, and the income is not low.
Insurance companies are like bankers. It doesn't charge a high premium. How to balance the income and expenses in the case of large-scale and high claims?
However, as we all know, the banker's game is to make money whether you are out of danger or not.